PRELIM Festival Ranch CFD (Buckeye AZ) GO, Srs 25 v2 5-5-25(6531568.2).pdf
City of Buckeye — Joint Community Facilities Districts (2025-05-20)
Extracted text (via pymupdf)
195571 characters
* Subject to change.
This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shall this Preliminary Official
Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
PRELIMINARY OFFICIAL STATEMENT DATED ____________, 2025
NEW ISSUE - BOOK-ENTRY-ONLY
RATINGS: See “RATINGS” herein.
INSURANCE: See “BOND INSURANCE AND RELATED RISK FACTORS” herein.
In the opinion of Gust Rosenfeld P.L.C., Phoenix, Arizona, Bond Counsel, under existing laws, regulations, rulings and judicial decisions, and
assuming continuing compliance with certain restrictions, conditions and requirements by the District, the interest income on the Bonds is
excludable from gross income for the purpose of calculating federal income taxes under Section 103 of the Internal Revenue Code of 1986, as
amended (the “Code”), and is exempt from Arizona income taxes. Interest income on the Bonds is not an item of tax preference to be included
in computing the alternative minimum tax; however, such interest is taken into account in determining the annual adjusted financial statement
income of applicable corporations (as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended) for the purpose of computing
the alternative minimum tax imposed on corporations. See “TAX EXEMPTION,” “ORIGINAL ISSUE DISCOUNT,” and “BOND PREMIUM”
herein.
The Board of Directors of the District has designated the Bonds as “qualified tax-exempt obligations” for purposes of Section 265(b)(3)(B) of
the Internal Revenue Code of 1986, as amended, which relates to the ability of certain financial institutions to deduct the interest expense
allocable to holding and carrying tax-exempt obligations for federal income tax purposes. Representatives of the Board of Directors of the
District will represent and warrant that they do not anticipate that the aggregate amount of tax-exempt obligations that will be issued by or on
behalf of the District in calendar year 2025 will exceed $10,000,000. See “QUALIFIED TAX-EXEMPT OBLIGATIONS” herein.
$5,340,000*
FESTIVAL RANCH COMMUNITY FACILITIES DISTRICT
(CITY OF BUCKEYE, ARIZONA)
GENERAL OBLIGATION BONDS, SERIES 2025
(BANK QUALIFIED)
Dated: Date of initial delivery
Due: As shown on the inside front cover page
The General Obligation Bonds, Series 2025 (the “Bonds”) of Festival Ranch Community Facilities District (City of Buckeye, Arizona) (the
“District”), will be issued in the form of fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust
Company (“DTC”), and will be available initially to ultimate purchasers through the book-entry-only system maintained by DTC in amounts
of $5,000 of principal amount or integral multiples in excess thereof due on specified maturity dates. Interest on the Bonds will be paid
semiannually on January 15 and July 15 of each year, commencing January 15, 2026*. Payments of principal and interest will be paid by wire
transfer to DTC for subsequent disbursements to DTC participants which will remit such payments to the beneficial owners of the Bonds. See
APPENDIX D - “BOOK-ENTRY-ONLY SYSTEM.”
SEE INSIDE FRONT COVER PAGE FOR MATURITY SCHEDULE
The Bonds are authorized pursuant to Title 48, Chapter 4, Article 6, Arizona Revised Statutes, as amended (the “Enabling Act”), and an election
held on May 25, 2005, in and for the District. The Bonds will be issued pursuant to resolutions of the Board of Directors of the District adopted
on May 20, 2025. The Bonds will be payable as to both principal and interest from ad valorem taxes to be levied on all taxable property within
the boundaries of the District, without limitation as to rate or amount. See “SECURITY FOR AND SOURCES OF PAYMENT” herein.
Certain of the Bonds will be subject to redemption by the District prior to their stated maturity dates as described under “THE BONDS –
Redemption Provisions” herein.*
[Bond Insurer Language and Logo]
Proceeds of the sale of the Bonds will be used to finance the acquisition of certain public infrastructure by the District and to pay certain costs
of issuance of the Bonds.
Investment in the Bonds involves certain risks that each prospective investor should consider prior to investing. See “SECURITY
FOR AND SOURCES OF PAYMENT” and “RISK FACTORS” herein.
NEITHER THE FULL FAITH AND CREDIT NOR THE GENERAL TAXING POWER OF THE CITY OF BUCKEYE, ARIZONA,
THE STATE OF ARIZONA, OR ANY POLITICAL SUBDIVISION THEREOF (OTHER THAN THE DISTRICT), NOR THE FULL
FAITH AND CREDIT OF THE DEVELOPER (AS DEFINED HEREIN), WILL BE PLEDGED TO THE PAYMENT OF THE
BONDS. THE BONDS WILL BE OBLIGATIONS OF THE DISTRICT ONLY. NONE OF THE CITY OF BUCKEYE, ARIZONA,
THE DEVELOPER, THE STATE OF ARIZONA, OR ANY POLITICAL SUBDIVISION THEREOF (OTHER THAN THE
DISTRICT) WILL HAVE ANY OBLIGATION WITH RESPECT TO DEBT SERVICE FOR THE BONDS.
The Bonds will be offered when, as and if issued by the District and received by the Underwriter identified below (the “Underwriter”) and
subject to the legal opinion of Gust Rosenfeld P.L.C., Phoenix, Arizona, Bond Counsel, as to validity and tax exemption. Certain legal matters
will be passed upon for the District by its counsel, Gust Rosenfeld P.L.C., for the Underwriter by its counsel, Greenberg Traurig, LLP, Phoenix,
Arizona, and for the Developer by its counsel, Berens Blonstein PLC, Scottsdale, Arizona. It is expected that delivery of the Bonds will be
made through the facilities of DTC on or about ____________, 2025*.
This cover page contains certain information for general reference only. It is not a summary of the issue of which the Bonds are a part.
Investors are advised to read this Official Statement in its entirety to obtain information essential to the making of an informed investment
decision with respect to the Bonds.
DRAFT II
5/5/25
$5,340,000
FESTIVAL RANCH COMMUNITY FACILITIES DISTRICT
(CITY OF BUCKEYE, ARIZONA)
GENERAL OBLIGATION BONDS, SERIES 2025
(BANK QUALIFIED)
MATURITY SCHEDULE*
$___,000 ____% Term Bond Due 7/15/20__, Yield ____% CUSIP 315598___
$___,000 ____% Term Bond Due 7/15/20__, Yield ____% CUSIP 315598___
* Subject to change.
(1)
CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is
managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright© 2025
CGS. All rights reserved. CUSIP® data herein is provided by CGS. This data is not intended to create a database
and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for
convenience of reference only. None of the District, the Financial Advisor, the Underwriter, the Developer or
their agents or counsel assume responsibility for the accuracy of such numbers.
Maturity
Date
Principal
Interest
CUSIP®(1)
(July 15)
Amount
Rate
Yield
No. 315598
2026
$95,000
%
%
2028
45,000
2029
50,000
2030
55,000
2031
55,000
2032
60,000
2033
65,000
2034
65,000
2035
65,000
2036
75,000
2037
75,000
2038
75,000
2039
80,000
2040
85,000
2041
90,000
2042
95,000
2043
95,000
2044
105,000
2045
4,010,000
FESTIVAL RANCH COMMUNITY FACILITIES DISTRICT
(CITY OF BUCKEYE, ARIZONA)
DISTRICT BOARD
Eric Orsborn, District Board Chairman
Curtis Beard, District Board Member
Jamaine Berry, District Board Member
Clay Goodman, District Board Member
G. Patrick HagEstad, District Board Member
Craig Heustis, District Board Member
Tony Youngker, District Board Member
DISTRICT STAFF
David B. Roderique, Acting District Manager
William Kauppi, District Treasurer
Lucinda Aja, District Clerk
FINANCIAL ADVISOR
Hilltop Securities Inc.
Phoenix, Arizona
BOND COUNSEL
Gust Rosenfeld P.L.C.
Phoenix, Arizona
BOND REGISTRAR AND PAYING AGENT
U.S. Bank Trust Company, National Association
Tempe, Arizona
(i)
REGARDING THIS OFFICIAL STATEMENT
This Official Statement, which includes the cover page, the inside front cover page and the appendices hereto, should
be considered in its entirety, and no one subject should be considered less important than another by reason of location
in the text. Brief descriptions of Festival Ranch Community Facilities District (City of Buckeye, Arizona) (the
“District”), the District’s General Obligation Bonds, Series 2025 (the “Bonds”), the hereinafter described Bond
Resolution, the security for the Bonds, the Developer (as defined herein) and other information are included in this
Official Statement. Such descriptions do not purport to be comprehensive or definitive. All references herein to the
Bonds, the Bond Resolution and any other documents are qualified in their entirety by reference to such documents,
copies of which may be obtained from Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), at 2801 East
Camelback Road, Suite 300, Phoenix, Arizona 85016.
The information set forth herein has been obtained from the District, the Developer and other sources believed to be
reliable, but such information is not guaranteed as to accuracy or completeness and is not to be construed as the
promise or guarantee of the Underwriter or Hilltop Securities Inc. (the “Financial Advisor”). This Official Statement
contains, in part, estimates and matters of opinion that are not intended as statements of fact, and no representation is
made as to the correctness of such estimates and opinions or that they will be realized. The presentation of information,
including tables of ad valorem tax rates and bonded general obligation indebtedness, in this Official Statement is
intended to show recent historical information and, except as expressly stated otherwise, is not intended to indicate
future or continuing trends in the financial position or other affairs of the District. All information, estimates and
assumptions contained herein are based on past experience and on the latest information available and are believed to
be reliable, but no representations are made that such information, estimates and assumptions are correct, will
continue, will be realized or will be repeated in the future. To the extent that any statements made in this Official
Statement involve matters of opinion or estimates, whether or not expressly stated to be such, they are made as such
and not as representations of fact or certainty, and no representation is made that any of these statements have been or
will be realized. All forecasts, projections, opinions, assumptions or estimates are “forward looking statements” that
must be read with an abundance of caution and that may not be realized or may not occur in the future. Information
other than that obtained from official records of the District has been identified by source and has not been
independently confirmed or verified by the District, the Financial Advisor, the Underwriter, the Developer, or any of
their legal counsel, including counsel to the Underwriter and Bond Counsel (as defined herein) and its accuracy cannot
be guaranteed. The information and expressions of opinion herein are subject to change without notice, and neither
the delivery of this Official Statement nor any sale made pursuant hereto will, under any circumstances, create any
implication that there has been no change in the affairs of the District or any of the other parties or matters described
herein since the date hereof.
The Bonds will not be registered under the Securities Act of 1933, as amended, or any state securities law, and will
not be listed on any stock or other securities exchange. Neither the Securities and Exchange Commission nor any
other federal, state or other governmental entity or agency will have passed upon the accuracy or adequacy of this
Official Statement or approved the Bonds for sale.
References to website addresses presented herein are for informational purposes only and may be in the form of a
hyperlink solely for the reader’s convenience. Unless specified otherwise, such websites and the information or links
contained therein are not incorporated into, and are not part of, this Official Statement for purposes of Rule 15c2-12
of the Securities and Exchange Commission.
The District will undertake to provide continuing disclosure as described in this Official Statement under the heading
“CONTINUING DISCLOSURE” and in APPENDIX C – “FORM OF CONTINUING DISCLOSURE
UNDERTAKING,” all pursuant to Rule 15c2-12 of the Securities and Exchange Commission.
The Underwriter has provided the following sentence for inclusion in this Official Statement: “The Underwriter has
reviewed the information in this Official Statement pursuant to its responsibilities to investors under the federal
securities laws, but the Underwriter does not guarantee the accuracy or completeness of such information.”
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY ALLOW CONCESSIONS OR
DISCOUNTS FROM THE INITIAL PUBLIC OFFERING PRICES TO DEALERS AND OTHERS.
(ii)
TABLE OF CONTENTS
Page
MAP SHOWING LOCATION OF THE DISTRICT WITHIN METROPOLITAN PHOENIX AREA .................. (iv)
AERIAL PHOTOGRAPH OF THE DISTRICT ........................................................................................................ (v)
THE DISTRICT ............................................................................................................................................................ 1
THE BONDS ................................................................................................................................................................. 1
Authority and Election ........................................................................................................................................... 1
General Description ................................................................................................................................................ 2
Bond Registrar and Paying Agent .......................................................................................................................... 2
Redemption Provisions ........................................................................................................................................... 2
Registration and Transfer When Book-Entry-Only System Has Been Discontinued ............................................. 4
SOURCES AND APPLICATIONS OF FUNDS .......................................................................................................... 4
SECURITY FOR AND SOURCES OF PAYMENT .................................................................................................... 5
General ................................................................................................................................................................... 5
Defeasance.............................................................................................................................................................. 5
Ad Valorem Property Taxation in the District ........................................................................................................ 5
OVERLAPPING, ADDITIONAL AND ADDITIONAL OVERLAPPING INDEBTEDNESS ................................ 14
Overlapping General Obligation Bonded Indebtedness ....................................................................................... 14
Additional General Obligation Bonded Indebtedness of the District ................................................................... 16
Additional Overlapping General Obligation Bonded Indebtedness ..................................................................... 16
Other Debt of the District ..................................................................................................................................... 17
LAND DEVELOPMENT ............................................................................................................................................ 17
In General ............................................................................................................................................................. 17
Land Development Agreements/Community Master Plan ................................................................................... 18
Additional Entitlements ........................................................................................................................................ 19
Residential Development ...................................................................................................................................... 20
THE PUBLIC INFRASTRUCTURE .......................................................................................................................... 21
Water Reclamation Facility .................................................................................................................................. 21
Water Production Campus .................................................................................................................................... 22
Assured Water Supply .......................................................................................................................................... 22
Streets/Water and Sewer Lines ............................................................................................................................. 23
Police and Fire ...................................................................................................................................................... 24
Other ..................................................................................................................................................................... 24
PUBLIC INFRASTRUCTURE FINANCED BY THE BONDS ................................................................................ 24
DEVELOPER .............................................................................................................................................................. 25
RISK FACTORS ......................................................................................................................................................... 25
General Risks of Real Estate Investment and Development; Certain Factors Which May Adversely
Affect Development; Consequences ............................................................................................................. 25
Failure or Inability to Complete Proposed Development ..................................................................................... 26
Completion of the Public Infrastructure and the Other Infrastructure .................................................................. 26
Sale of Portions of the Land in the District .......................................................................................................... 27
Lack of Availability of Utilities and Water .......................................................................................................... 27
Effect of Valuation of Property ............................................................................................................................ 27
Direct and Overlapping Indebtedness ................................................................................................................... 27
Bankruptcy and Foreclosure Delays ..................................................................................................................... 28
Amendment of Documents Referenced ................................................................................................................ 29
Environmental Matters ......................................................................................................................................... 29
Forward Looking Statements................................................................................................................................ 29
No Review of Filings............................................................................................................................................ 29
Homeowner Complaints ....................................................................................................................................... 29
Risk of Internal Revenue Service Audit ............................................................................................................... 30
LITIGATION .............................................................................................................................................................. 30
LEGAL MATTERS .................................................................................................................................................... 30
FINANCIAL STATEMENTS ..................................................................................................................................... 31
(iii)
TAX EXEMPTION ..................................................................................................................................................... 31
ORIGINAL ISSUE DISCOUNT ................................................................................................................................. 32
BOND PREMIUM ...................................................................................................................................................... 32
RATINGS .................................................................................................................................................................... 33
BOND INSURANCE .................................................................................................................................................. 33
RISK FACTORS RELATED TO BOND INSURANCE ............................................................................................ 33
UNDERWRITING ...................................................................................................................................................... 34
CONTINUING DISCLOSURE ................................................................................................................................... 34
FINANCIAL ADVISOR ............................................................................................................................................. 35
RELATIONSHIP AMONG PARTIES ....................................................................................................................... 35
APPENDIX A:
INFORMATION REGARDING THE CITY OF BUCKEYE, ARIZONA .............................. A-1
APPENDIX B:
FORM OF LEGAL OPINION OF BOND COUNSEL ............................................................. B-1
APPENDIX C:
FORM OF CONTINUING DISCLOSURE UNDERTAKING ................................................ C-1
APPENDIX D:
BOOK-ENTRY-ONLY SYSTEM ............................................................................................ D-1
APPENDIX E:
AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2024 ..... E-1
APPENDIX F:
SPECIMEN MUNICIPAL BOND INSURANCE POLICY ..................................................... F-1
(iv)
MAP SHOWING LOCATION OF THE DISTRICT
WITHIN METROPOLITAN PHOENIX AREA
(v)
AERIAL PHOTOGRAPH OF THE DISTRICT
1
*
Subject to change.
OFFICIAL STATEMENT
$5,340,000*
FESTIVAL RANCH COMMUNITY FACILITIES DISTRICT
(CITY OF BUCKEYE, ARIZONA)
GENERAL OBLIGATION BONDS, SERIES 2025
This Official Statement, which includes the cover page, the inside front cover page and the appendices hereto, provides
certain information concerning the Festival Ranch Community Facilities District (City of Buckeye, Arizona) General
Obligation Bonds, Series 2025 (the “Bonds”) to be issued in the principal amounts indicated above.
THE DISTRICT
Pursuant to the Community Facilities District Act of 1988, constituting Title 48, Chapter 4, Article 6, Arizona Revised
Statutes, as amended (the “Enabling Act”), and in response to a petition by Pulte Home Corporation, which
subsequently, by converting, became the Pulte Home Company, LLC (the “Developer”), the Mayor and Council of
the Town of Buckeye, Arizona (the “Town”), adopted a resolution on April 19, 2005, which formed Festival Ranch
Community Facilities District (City of Buckeye, Arizona) (the “District”). Effective January 1, 2014, the Town
reorganized as a city and became the City of Buckeye, Arizona (the “City”), the successor in interest to the Town.
See APPENDIX A - “INFORMATION REGARDING THE CITY OF BUCKEYE, ARIZONA” hereto for
information about the City and the information under the heading “DEVELOPER” herein for information about the
Developer.
The District encompasses approximately 4,015 acres within the City and is located approximately 34 miles west of
downtown Phoenix, Arizona, 17 miles north of Interstate 10, and seven miles west of current development within the
City of Surprise, Arizona. See the map on page (iv) with respect to the location of the District and the aerial photograph
of the District on page (v).
The District is a special purpose, tax levying public improvement district for purposes of the constitution of the State
of Arizona (the “State” or “Arizona”) and a municipal corporation for certain purposes of the laws of the State. Except
as otherwise provided in the Enabling Act, the District is considered to be a municipal corporation and political
subdivision of the State, separate and apart from the City. The Mayor and Council of the City serve, ex officio, as
members of the District Board (the “Board”), and the City Manager of the City serves as the District Manager.
Pursuant to the terms of certain development agreements among the City, the Developer and the District, the District
has provided financing for the acquisition of certain public infrastructure necessary for development of the land within
the boundaries of the District. See “LAND DEVELOPMENT” herein. The District has the authority, with voter
approval, to issue general obligation bonds payable from ad valorem taxes levied on all taxable property within the
boundaries of the District, without limitation as to rate or amount, to finance, among other things, the acquisition costs
of public infrastructure purposes within the District, including incidental costs and the costs of issuing bonds. The
District also levies a $0.30 ad valorem tax per $100 of Net Limited Assessed Property Value (as defined herein), the
proceeds of which are used to pay a portion of the operation and maintenance expenses of the District and of the public
infrastructure financed by the District (the “Operation and Maintenance Tax”).
THE BONDS
Authority and Election
The Bonds are authorized pursuant to the Enabling Act and an election held on May 25, 2005 (the “Election”). The
Bonds will be the sixteenth series of bonds issued pursuant to the authorization approved at the Election, and, after
issuance of the Bonds, $101,057,622* principal amount of general obligation bonds of the District will remain
authorized but unissued. Additional indebtedness could be authorized for the District in the future pursuant to other
2
*
Subject to change.
elections. The Bonds are being issued in order to (i) finance a portion of the cost for the District to acquire the Public
Infrastructure Financed by the Bonds (as defined herein) from the Developer and (ii) pay certain costs of issuance of
the Bonds. See “PUBLIC INFRASTRUCTURE FINANCED BY THE BONDS.”
The Bonds will be issued pursuant to a resolution adopted by the Board on May 20, 2025 (the “Bond Resolution”).
.
See “SECURITY FOR AND SOURCES OF PAYMENT - Ad Valorem Property Taxation in the District” and
“OVERLAPPING, ADDITIONAL AND ADDITIONAL OVERLAPPING INDEBTEDNESS - Additional General
Obligation Bonded Indebtedness of the District.”
General Description
The Bonds will be dated the date of their initial delivery, and will mature and bear interest at the rates as set forth on
the inside front cover page of this Official Statement.
Interest on the Bonds will be paid semiannually on January 15 and July 15 of each year, commencing January 15,
2026* (each such date being referred to herein as an “Interest Payment Date”). The Bonds will bear interest from the
most recent Interest Payment Date to which interest has been paid or duly provided for or, if no interest has been paid,
from the date of their initial delivery, calculated on the basis of a 360-day year of twelve 30-day months. See
APPENDIX D - “BOOK-ENTRY-ONLY SYSTEM.” The District has chosen the close of business on the last day
of the calendar month (other than a Saturday, Sunday, or a legal holiday or equivalent (other than a moratorium) for
banking institutions generally (a “Business Day”)) next preceding the applicable Interest Payment Date, or if such day
is not a Business Day, the previous Business Day, as the record date for the Bonds (the “Record Date”).
The principal of, redemption price for and interest on the Bonds will be payable when due to Cede & Co., as nominee
of The Depository Trust Company (“DTC”). DTC will act as the securities depository of the Bonds for a book-entry-
only system (the “Book-Entry-Only System”). The Bonds will be available initially to ultimate purchasers under such
system in amounts of $5,000 of principal and integral multiples in excess thereof due on specified maturity dates. No
document of any nature whatsoever need be surrendered as a condition to payment of the principal of and interest on
the Bonds. See APPENDIX D - “BOOK-ENTRY-ONLY SYSTEM.”
Bond Registrar and Paying Agent
U.S. Bank Trust Company, National Association will serve as the initial bond registrar, transfer agent and paying
agent (the “Bond Registrar and Paying Agent”) for the Bonds. The District may change the Bond Registrar and Paying
Agent without notice to or consent of the owners of the Bonds.
Redemption Provisions*
Optional Redemption. The Bonds maturing before or on July 15, 20__ will not be subject to redemption prior to their
maturity. The Bonds maturing on or after July 15, 20__ will be subject to redemption prior to maturity, at the option
of the District, in whole or in part from maturities selected by the District on July 15, 20__, or on any date thereafter,
by the payment of a redemption price equal to the principal amount of each Bond redeemed, plus interest accrued to
the date fixed for redemption but without premium.
Mandatory Redemption. The Bonds maturing on July 15 of the following years will be redeemed from funds of the
District prior to maturity on July 15 of the following years and in the following principal amounts, upon payment of
the redemption price which consists of the principal amount of the Bonds so redeemed plus accrued interest, if any,
on the Bonds so redeemed from the most recent Interest Payment Date to the redemption date, but without premium:
3
*
Subject to change.
Term Bonds due July 15, 20__*
Year
Principal Amount
20__
$___,000
20__
___,000
20__
___,000
20__
___,000
20__
___,000 (maturity)
Term Bonds due July 15, 20__*
Year
Principal Amount
20__
$___,000
20__
___,000
20__
___,000
20__
___,000
20__
___,000 (maturity)
Whenever Bonds which are subject to mandatory redemption are redeemed (other than pursuant to mandatory
redemption) or are delivered to the Bond Registrar and Paying Agent for cancellation, the principal amount of the
Bonds of such maturity so retired shall satisfy and be credited against the mandatory redemption requirements for
such years as the District may direct.
Notice of Redemption. So long as the Bonds are held under the Book-Entry-Only System, notices of redemption will
be sent to DTC in the manner required by DTC. See APPENDIX D – “BOOK-ENTRY-ONLY SYSTEM.” If the
Book-Entry-Only System is discontinued, notice of redemption of any Bond will be mailed to the registered owner of
the Bond or Bonds being redeemed at the address shown on the bond register maintained by the Bond Registrar and
Paying Agent not more than 60 nor less than 30 days prior to the date set for redemption. Notice of redemption may
be sent to any securities depository by mail, facsimile transmission, wire transmission or any other means of
transmission of the notice generally accepted by the respective securities depository. Neither the failure of any
registered owner of Bonds to receive a notice of redemption nor any defect therein will affect the validity of the
proceedings for redemption of Bonds as to which proper notice of redemption was given.
Notice of any redemption will also be provided as set forth in APPENDIX C – “FORM OF CONTINUING
DISCLOSURE UNDERTAKING,” but no defect in said further notice or record nor any failure to give all or a portion
of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as
prescribed above.
If monies for the payment of the redemption price and accrued interest are not held in separate accounts by or on
behalf of the District or the Bond Registrar and Paying Agent prior to sending the notice of redemption, such
redemption shall be conditional on such monies being so held on the date set for redemption and if not so held by such
date, the redemption shall be cancelled and be of no force and effect.
Effect of Redemption. On the date designated for redemption, the Bonds or portions thereof to be redeemed will
become and be due and payable at the redemption price for such Bonds or portions thereof, and, if monies for payment
of the redemption price are held in a separate account by the Bond Registrar and Paying Agent, interest on such Bonds
or portions thereof to be redeemed will cease to accrue, such Bonds or portions thereof will cease to be entitled to any
benefit or security under the Bond Resolution, the owners of such Bonds or portions thereof will have no rights in
respect thereof except to receive payment of the redemption price thereof and such Bonds or portions thereof will be
deemed paid and no longer outstanding. DTC’s practice is to determine by lot the amount of each Direct Participant’s
(as defined in APPENDIX D – “BOOK-ENTRY-ONLY SYSTEM”) proportionate share that is to be redeemed.
4
Redemption of Less than All of a Bond. The District may redeem any amount that is included in a Bond that is subject
to prior redemption in a denomination equal to or in excess of, but divisible by, $5,000. In the event of a partial
redemption, the Bond will be redeemed in accordance with DTC’s procedures. In the event of a partial redemption
after the Book-Entry-Only System is discontinued, the registered owner will submit the Bond for partial
redemption and the Bond Registrar and Paying Agent will make such partial payment and will cause to be issued a
new Bond in a principal amount which reflects the redemption so made, to be authenticated and delivered to the
registered owner thereof.
Registration and Transfer When Book-Entry-Only System Has Been Discontinued
If the Book-Entry-Only System is discontinued, the Bonds will be transferred only upon the bond register maintained
by the Bond Registrar and Paying Agent and one or more new Bonds, registered in the name of the transferee, of the
same principal amount, maturity and rate of interest as the surrendered Bond or Bonds will be authenticated, upon
surrender to the Bond Registrar and Paying Agent of the Bond or Bonds to be transferred, together with an appropriate
instrument of transfer executed by the transferor if the Bond Registrar and Paying Agent’s requirements for transfer
are met. The Bond Registrar and Paying Agent may, but is not required to, transfer or exchange any Bonds during
the period from the Record Date to and including the respective Interest Payment Date. The Bond Registrar and
Paying Agent may, but is not required to, transfer or exchange any Bonds that have been selected for prior redemption.
The transferor will be responsible for all fees, taxes and any other costs relating to the transfer of ownership of
individual Bonds.
SOURCES AND APPLICATIONS OF FUNDS
Sources
Par Amount of the Bonds
$5,340,000.00*
[Net] Original Issue Premium/Discount (a)
Developer Contribution
Total
Applications
Cost of Acquisition
Payment of Costs of Issuance (b)
Total
* Subject to change.
(a)
[Net original issue premium consists of original issue premium on the Bonds, less original issue discount on
the Bonds.]
(b)
Will include premium on the Policy (as defined herein) and compensation and costs of the Underwriter (as
defined herein) with respect to the Bonds.
5
SECURITY FOR AND SOURCES OF PAYMENT
General
The Board will annually levy and cause an ad valorem tax to be collected, at the same time and in the same manner
as other taxes are levied and collected on all taxable property in the District, sufficient, together with any amounts
from the sources described in the Enabling Act and available pursuant to the Bond Resolution, to pay debt service
with respect to the Bonds (whether at maturity or prior redemption) when due, such ad valorem tax to be unlimited as
to rate or amount. Amounts derived from the levy of such tax when collected constitute funds to pay the debt service
on the outstanding general obligation bonds of the District, including debt service with respect to the Bonds, and will
be kept separately from other funds of the District. With respect to ad valorem property taxes, the outstanding general
obligation bonds of the District and the Bonds will be payable from such taxes on the same basis as issues of general
obligation bonds of the District which may be issued in the future. In addition to the levy of ad valorem property taxes
for the payment of debt service on the Bonds, the Board also levies the Operation and Maintenance Tax. See TABLE
7 herein for information regarding the outstanding general obligation bonds of the District. See also
“OVERLAPPING, ADDITIONAL AND ADDITIONAL OVERLAPPING INDEBTEDNESS – Additional General
Obligation Bonded Indebtedness of the District.”
NEITHER THE FULL FAITH AND CREDIT NOR THE GENERAL TAXING POWER OF THE CITY, THE
STATE OR ANY POLITICAL SUBDIVISION THEREOF (OTHER THAN THE DISTRICT), NOR THE
FULL FAITH AND CREDIT OF THE DEVELOPER, WILL BE PLEDGED TO THE PAYMENT OF THE
BONDS. THE BONDS WILL BE OBLIGATIONS OF THE DISTRICT ONLY. NONE OF THE CITY, THE
DEVELOPER, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF (OTHER THAN THE
DISTRICT) WILL HAVE ANY OBLIGATION WITH RESPECT TO DEBT SERVICE FOR THE BONDS.
Defeasance
Pursuant to the Bond Resolution, payment of all or any part of the Bonds may be provided for by the irrevocable
deposit, in trust, of monies or obligations issued or guaranteed by the United States of America (“Defeasance
Obligations”) or both, which, with the maturing principal of and interest on such Defeasance Obligations, if any, will
be sufficient, as evidenced by a certificate or report of an accountant, to pay when due the principal or redemption
price of and interest on such Bonds. Any Bonds so provided for will no longer be outstanding under the Bond
Resolution or payable from ad valorem taxes on taxable property in the District, and the owners of such Bonds shall
thereafter be entitled to payment only from the monies and Defeasance Obligations deposited in trust.
Ad Valorem Property Taxation in the District
Taxes levied for the maintenance and operation of counties, cities, towns, school districts, community college districts
and the State are “primary taxes.” Taxes levied for payment of bonds like the Bonds, voter-approved budget overrides,
and the maintenance and operation of special service districts such as sanitary, fire, road improvement and career
technical education districts are “secondary taxes.” See “Primary Taxes” and “Secondary Taxes” below.
Taxable Property. Real property and improvements and personal property are either valued by the Assessor of
Maricopa County, Arizona (the “County”) or the Arizona Department of Revenue (the “Department of Revenue”).
Property valued by the Assessor of the County is referred to as “locally assessed” property and generally encompasses
residential, agricultural and traditional commercial and industrial property. Property valued by the Department of
Revenue is referred to as “centrally valued” property and generally includes large mine and utility entities.
Locally assessed property is assigned two values: Full Cash Value and Limited Property Value (both as defined
herein). Centrally valued property is assigned one value: Full Cash Value.
Full Cash Value. In the context of a specific property parcel, full cash value (“Full Cash Value”) is statutorily defined
to mean “the value determined as prescribed by statute” or if a statutory method is not prescribed it is “synonymous
with market value, which means the estimate of value that is derived annually by using standard appraisal methods
and techniques,” which generally include the market approach, the cost approach and the income approach. In valuing
locally assessed property, the Assessor of the County generally uses a cost approach to value commercial/industrial
property and a market approach to value residential property. In valuing centrally valued property, the Department of
Revenue begins generally with information provided by taxpayers and then applies procedures provided by State law.
6
State law allows taxpayers to appeal such Full Cash Values by providing evidence of a lower value, which may be
based upon another valuation approach. Full Cash Value is used as the ceiling for determining Limited Property
Value. Unlike Limited Property Value, increases in Full Cash Value are not limited.
Limited Property Value. In the context of a specific property parcel, limited property value (“Limited Property Value”)
is a property value determined pursuant to the Arizona Constitution and the Arizona Revised Statutes. Except as
described in the next sentence, for locally assessed property in existence in the prior year, Limited Property Value is
limited to the lesser of Full Cash Value or an amount 5% greater than Limited Property Value determined for the prior
year for such specific property parcel. In the following circumstances, Limited Property Value is established at a level
or percentage of Full Cash Value that is comparable to that of other properties of the same or a similar use or
classification: property that was erroneously totally or partially omitted from the property tax rolls in the preceding
tax year, except as a result of the matters described in this sentence; property for which a change in use has occurred
since the preceding tax year and property that has been modified by construction, destruction, or demolition since the
preceding valuation year such that the total value of the modification is equal to or greater than 15% of the Full Cash
Value. (Limited Property Value of property that has been split, subdivided or consolidated varies depending on when
the change occurred.) A separate Limited Property Value is not provided for centrally valued property.
Full Cash Value and Limited Property Value for Taxing Jurisdictions. The Full Cash Value in the context of a taxing
jurisdiction is the sum of the Full Cash Value associated with each parcel of property in the jurisdiction. Full Cash
Value of the jurisdiction is the basis for determining constitutional and statutory debt limits for certain political
subdivisions in Arizona, including the District.
The Limited Property Value in the context of a taxing jurisdiction is the sum of the Limited Property Value associated
with each parcel of locally assessed property within the jurisdiction plus the sum of the Full Cash Value associated
with each parcel of centrally valued property within the jurisdiction. Limited Property Value of the jurisdiction is
used as the basis for levying both primary and secondary taxes. See “Primary Taxes” and “Secondary Taxes” below.
Property Classification and Assessment Ratios. All property, both real and personal, is assigned a classification
(defined by property use) and related assessment ratio that is multiplied by the Limited Property Value or Full Cash
Value of the property, as applicable, to obtain the “Limited Assessed Property Value” and the “Full Cash Assessed
Value,” respectively.
The assessment ratios for each property classification are set forth by tax year in the following table.
TABLE 1
Property Tax Assessment Ratios (Tax Year)
(a)
Additional property classifications exist, but seldom amount to a significant portion of a municipal body’s total
valuation.
(b)
The assessment ratio for this property classification will decrease to 15.5% for tax year 2026 and 15% for
each tax year thereafter.
(c)
This percentage is determined annually pursuant to Section 42-15005, Arizona Revised Statutes.
Source:
State and County Abstract of the Assessment Roll, Arizona Department of Revenue, 2025 Final Property
Class Summary, Arizona Department of Revenue.
Property Classification (a)
2021
2022
2023
2024
2025
Mining, utilities, commercial and industrial (b)
18%
17.5%
17%
16.5%
16%
Agricultural and vacant land
15
15
15
15
15
Owner occupied residential
10
10
10
10
10
Leased or rented residential
10
10
10
10
10
Railroad, private car company and airline
flight property (c)
15
15
14
14
13
7
Primary Taxes. Per State statute, taxes levied for the maintenance and operation of counties, cities, towns, school
districts, community college districts and the State are “primary taxes.” Primary taxes are levied against Net Limited
Assessed Property Value. “Net Limited Assessed Property Value” is determined by excluding the value of property
exempt from taxation from Limited Assessed Property Value of locally assessed property and from Full Cash Assessed
Value of centrally valued property and combining the resulting two amounts.
The primary taxes levied by each county, city, town and community college district are constitutionally limited to a
maximum increase of 2% over the maximum allowable prior year’s levy limit plus any taxes on property not subject
to taxation in the preceding year (e.g., new construction and property brought into the jurisdiction because of
annexation). The 2% limitation does not apply to primary taxes levied on behalf of school districts.
The combined taxes on owner occupied residential property only, for purposes other than voter-approved bonded
indebtedness and overrides and certain special district assessments, are constitutionally limited to 1% of the Limited
Property Value of such property. This constitutional limitation on the combined tax levies for owner occupied
residential property is implemented by reducing the school district’s taxes. To offset the effects of reduced school
district property taxes, the State compensates the school district by providing additional State aid.
Secondary Taxes. Per State statute, taxes levied for payment of bonds like the Bonds, voter-approved budget
overrides, and the maintenance and operation of special purpose districts such as sanitary, fire, road improvement, and
career technical education districts, and the taxes levied by school districts for qualified desegregation expenditures
are “secondary taxes.” Like primary taxes, secondary taxes are also levied against Net Limited Assessed Property
Value. There is no constitutional or statutory limitation on annual levies for voter-approved bond indebtedness and
overrides and certain special district assessments.
Tax Procedures. The State tax year has been defined as the calendar year, notwithstanding the fact that tax procedures
begin prior to January 1 of the tax year and continue through May of the succeeding calendar year.
On or before the third Monday in August each year the Board of Supervisors of the County prepares the tax roll setting
forth certain valuations by taxing district of all property in the County subject to taxation. The tax roll is then
forwarded to the Treasurer of the County. (The Assessor of the County is required to have completed the assessment
roll by December 15th of the year prior to the levy. This roll identifies the valuation and classification of each parcel
located within the County for the tax year.)
Property owners may file an appeal with the Assessor of the County to request a review of the Assessor of the County’s
determination of the Full Cash Value and legal classification of their property. Once the appeals process is complete,
the Assessor of the County, if necessary, corrects the tax roll based upon the appeal decisions and sends the corrected
values to each taxing jurisdiction (cities, school districts, including the District, community colleges and special
districts such as fire and health).
With the various budgetary procedures having been completed by the governmental entities, the appropriate tax rate
for each jurisdiction is then levied upon each non-exempt parcel of property in order to determine the total tax owed
by each property owner. Any subsequent decrease in the value of the tax roll due to appeals or other reasons reduces
the amount of taxes received by each jurisdiction.
In 2021, the Arizona Court of Appeals ruled in Qasimyar v. Maricopa County that certain transitions between property
classifications qualified as a “change in use” requiring recalculation of the limited property value of the affected
properties. On April 5, 2024, the Treasurer of the County released initial estimated financial impacts to the various
taxing jurisdictions. The Treasurer of the County also indicated that the refund process would begin in July 2024. As
of December 2024, the initial taxpayer refund process is essentially complete and resulted in a reduction in cash from
property tax revenue (excluding secondary property tax revenue collection for bond debt service) for the taxing
jurisdictions, including the District. The District’s reduction in cash from primary property tax revenues as of
December 2024 is approximately $__________. The District will have sufficient funds on deposit to pay principal of
and interest on its general obligation bonds on a timely basis even with the one-time reduction in tax revenues as a
result of the refunds.
8
The property tax lien on real property attaches on January 1 of the year the tax is levied. Such lien is prior and superior
to all other liens and encumbrances on the property subject to such tax except liens or encumbrances held by the State
or liens for taxes accruing in any other years and liens imposed by the United States. Set forth in TABLE 2 is a record
of property taxes levied and collected in the District for a portion of the current fiscal year and the previous five fiscal
years.
TABLE 2
Property Taxes Levied and Collected (a)
Festival Ranch Community Facilities District
(a)
Taxes are collected by the Treasurer of the County. Taxes in support of debt service are levied by the Board
of Supervisors of the County as required by Arizona Revised Statutes. Interest and penalty collections for
delinquent taxes are not included in the collection figures in TABLE 2, but are deposited in the County’s
General Fund.
(b)
2024/25 taxes in course of collection:
First installment due 10-01-24; delinquent 11-01-24
Second installment due 03-01-25; delinquent 05-01-25.
Source:
Office of the Treasurer of the County.
Delinquent Tax Procedures. The property taxes due the District are billed, along with State and other taxes, each
September, are due and payable in two installments on October 1 and March 1, and become delinquent on November
1 and May 1, respectively. Delinquent taxes are subject to an interest penalty of 16% per annum, prorated monthly at
a rate of 1.33% as of the first day of each subsequent month. (Interest and penalties for delinquent taxes are waived
if a taxpayer, delinquent as to the November 1 payment, pays the entire year’s tax bill by December 31.) After the
close of the tax collection period, the Treasurer of the County prepares a delinquent property tax list and the property
so listed is subject to a tax lien sale in February of the succeeding year. In the event that there is no purchaser for the
tax lien at the sale, the tax lien is assigned to the State, and the property is reoffered for sale from time to time until
such time as it is sold, subject to redemption, for an amount sufficient to cover all delinquent taxes.
After three years from the sale of the tax lien, the tax lien certificate holder may bring an action in a court of competent
jurisdiction to foreclose the right of redemption and, if the delinquent taxes plus accrued interest are not paid by the
owner of record or any entity having a right to redeem, a judgment is entered ordering the Treasurer of the County to
deliver a treasurer’s deed to the certificate holder as prescribed by law.
Chapter 176, Laws of Arizona 2024 (commonly referred to by its original bill number as “SB 1431”) revises the
redemption and foreclosure process for tax lien certificate holders whereby a delinquent taxpayer may request an entry
of judgment directing the sale of the property for excess proceeds. If a delinquent taxpayer requests an excess proceeds
sale, and an entry of judgment is granted to direct such excess proceeds sale, a tax lien certificate holder’s potential
financial return on the subject tax lien eligible for foreclosure may decrease relative to the tax lien certificate holder’s
potential financial return on such tax lien prior to the enactment of SB 1431. Therefore, in connection with the new
Adjusted
Collected to June 30th
Adjusted
Cumulative Collections
Adopted
District
of Initial Fiscal Year
District Tax
to March 31, 2025
Fiscal
District
District
Tax Levy as
% of Adj.
Levy as of
% of Adj.
Year
Tax Rate
Tax Levy
of June 30th
Amount
Levy
3/31/2025
Amount
Levy
2024/25
3.1959
$
4,376,993
$
(b)
(b)
(b)
4,371,673
$
3,143,682
$
71.91
2023/24
3.1731
3,874,336
3,848,267
$
3,802,764
$
98.82
3,747,215
3,747,215
100.00
2022/23
3.1493
3,439,014
3,434,604
3,391,658
98.75
3,333,726
3,333,723
100.00
2021/22
3.0749
2,996,446
2,996,158
2,981,002
99.49
2,915,597
2,915,596
100.00
2020/21
2.8803
2,446,185
2,428,199
2,422,916
99.78
2,370,406
2,390,405
100.00
2019/20
3.3232
2,455,175
2,454,593
2,439,967
99.40
2,395,663
2,395,663
100.00
%
%
9
excess proceeds sale process instituted by SB 1431, it is reasonable to conclude that “tax sale investors” may be less
willing to purchase tax liens. The effective date of SB 1431 was September 14, 2024. None of the District, the
Financial Advisor, the Underwriter, the Developer or the counsel or agents of any of them, are able to determine or
predict what impact, if any, SB 1431 will have on property tax collections in the District.
In the event of bankruptcy of a taxpayer pursuant to the United States Bankruptcy Code (the “Bankruptcy Code”), the
law is currently unsettled as to whether a lien can attach against the taxpayer’s property for property taxes levied
during the pendency of bankruptcy. Such taxes might constitute an unsecured and possibly non-interest bearing
administrative expense payable only to the extent that the secured creditors of a taxpayer are oversecured, and then
possibly only on the prorated basis with other allowed administrative claims. It cannot be determined, therefore, what
adverse impact bankruptcy might have on the ability to collect ad valorem taxes on property of a taxpayer within the
District. Proceeds to pay such taxes come only from the taxpayer or from a sale of the tax lien on delinquent property.
When a debtor files or is forced into bankruptcy, any act to obtain possession of the debtor’s estate, any act to create
or perfect any lien against the property of the debtor or any act to collect, assess or recover a claim against the debtor
that arose before the commencement of the bankruptcy is stayed pursuant to the Bankruptcy Code. While the
automatic stay of a bankruptcy court may not prevent the sale of tax liens against the real property of a bankrupt
taxpayer, the judicial or administrative foreclosure of a tax lien against the real property of a debtor would be subject
to the stay of bankruptcy court. It is reasonable to conclude that “tax sale investors” may be reluctant to purchase tax
liens under such circumstances, and, therefore, the timeliness of the payment of post-bankruptcy petition tax
collections becomes uncertain.
It cannot be determined what impact any deterioration of the financial conditions of any taxpayer, whether or not
protection under the Bankruptcy Code is sought, may have on payment of or the secondary market for the Bonds.
None of the District, the Underwriter, the Financial Advisor (as defined herein), the Developer or their respective
agents or consultants has undertaken any independent investigation of the operations and financial condition of any
taxpayer, nor have they assumed responsibility for the same.
In the event the County is expressly enjoined or prohibited by law from collecting taxes due from any taxpayer, such
as may result from the bankruptcy of a taxpayer, any resulting deficiency could be collected in subsequent tax years
by adjusting the District’s tax rate charged to non-bankrupt taxpayers during such subsequent tax years. See “RISK
FACTORS – Bankruptcy and Foreclosure Delays.”
TABLE 3
Net Limited Assessed Property Value by Property Classification
Festival Ranch Community Facilities District
(a)
Totals may not add up due to rounding.
Source:
State and County Abstract of the Assessment Roll, Arizona Department of Revenue and Property Tax Rates
and Assessed Values, Arizona Tax Research Association.
See also in this respect the discussion under the heading “LAND DEVELOPMENT.”
Class
2024/25
2023/24
2022/23
2021/22
2020/21
Commercial, industrial, utilities & mines
4,758,318
$
2,627,849
$
3,338,453
$
3,719,796
$
3,060,862
$
Agricultural and vacant
1,122,046
1,657,328
795,473
1,430,371
2,583,575
Residential (owner occupied)
94,042,912
84,845,296
74,881,223
64,992,572
55,248,847
Residential (rental)
37,036,219
32,990,268
30,184,198
27,305,834
24,729,212
Totals (a)
136,959,496
$
122,120,741
$
109,199,348
$
97,448,573
$
85,622,496
$
10
TABLE 4
Net Limited Assessed Property Value of Major Taxpayers
Festival Ranch Community Facilities District
(a)
Some of such taxpayers or their parent corporations are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, and in accordance therewith file reports, proxy statements and
other information with the Securities and Exchange Commission (the “Commission”). Such reports, proxy
statements and other information (collectively, the “Filings”) may be inspected, copied and obtained at
prescribed rates at the Commission’s public reference facilities at 100 F Street, N.E., Washington, D.C. 20549-
2736. In addition, the Filings may also be inspected at the offices of the New York Stock Exchange at 20 Broad
Street, New York, New York 10005. The Filings may also be obtained through the Internet on the Commission’s
EDGAR database at http://www.sec.gov. No representative of the District, the Underwriter, the Financial
Advisor, Bond Counsel (as defined herein) or counsel to the Underwriter has examined the information set
forth in the Filings for accuracy or completeness, nor does any such representative assume responsibility for
the same.
(b)
Includes the Net Limited Assessed Property Value for taxpayers known by the Assessor of the County as Pulte
Home Corporation.
(c)
Totals may not add due to rounding.
Source:
The Assessor of the County.
See “RISK FACTORS - General Risks of Real Estate Investment and Development; Certain Factors Which
May Adversely Affect Development; Consequences.”
[Remainder of page left blank intentionally.]
As % of
2024/25
2024/25
Net Limited
Net Limited
Assessed
Assessed
Major Taxpayer (a)
Property Value
Property Value
Arizona Public Service
6,335,138
$
4.63
Pulte Home Company LLC (b)
3,907,296
2.85
Accipiter Communications Inc.
807,610
0.59
Sun City Festival Community Association Inc.
704,322
0.51
Transwestern Pipeline Company LLC
444,167
0.32
CP 2004 Station 1 LLC
221,818
0.16
Total (c)
12,420,352
$
9.07
%
11
TABLE 5
Comparative Net Limited Assessed Property Values
Festival Ranch Community Facilities District
(a)
Fiscal year 2025/26 values are subject to positive or negative adjustments until approved by the Board of
Supervisors of the County on or before August 18, 2025.
Source:
Property Tax Rates Assessed Values, Arizona Tax Research Association, Department of Finance of the
County and State and County Abstract of the Assessment Roll, Arizona Department of Revenue.
TABLE 6
Estimated Net Full Cash Value History
Festival Ranch Community Facilities District
(a)
Estimated Net Full Cash Value is the total market value of the property within the District less the estimated
Full Cash Value of property exempt from taxation within the District.
(b)
Fiscal year 2025/26 values are subject to positive or negative adjustments until approved by the Board of
Supervisors of the County on or before August 18, 2025.
Source:
State and County Abstract of the Assessment Roll, Arizona Department of Revenue.
Festival Ranch
Community
Fiscal
Facilities
City of
Maricopa
State of
Year
District
Buckeye
County
Arizona
2025/26 (a)
147,128,666
$
1,042,176,827
$
60,724,517,167
$
92,371,826,506
$
2024/25
136,959,496
953,508,266
58,328,686,358
88,425,611,337
2023/24
122,120,741
809,880,823
54,722,310,149
83,026,514,349
2022/23
109,199,348
718,798,778
51,575,018,185
78,415,651,030
2021/22
97,448,573
617,421,432
48,724,126,672
74,200,360,570
2020/21
85,622,496
558,013,165
45,704,969,813
69,914,763,468
Estimated
Fiscal
Net Full Cash
Year
Value (a)
2025/26 (b)
2,273,123,265
$
2024/25
2,322,420,865
2023/24
1,790,691,002
2022/23
1,333,626,470
2021/22
1,161,755,658
2020/21
978,486,976
12
The following table lists the general obligation bonded indebtedness of the District that will be outstanding after
issuance of the Bonds:
TABLE 7
General Obligation Bonded Indebtedness to be Outstanding
* Subject to change.
[Remainder of page left blank intentionally.]
Final
Maturity
Issue
Original
Date
Balance
Series
Amount
Purpose
(July 15)
Outstanding
Series 2016
5,410,000
$
Water main lines, wells, facilities
2036
4,715,000
$
Series 2017
3,665,000
Sewer lines, water lines and roadways
2037
2,975,000
Series 2017 Refunding
2,940,000
Refunding
2032
2,245,000
Series 2018
3,335,000
Water reclamation facility and road improvements
2038
2,955,000
Series 2019
5,715,000
Water reclamation facility
2039
4,845,000
Series 2019 Refunding
3,885,000
Refunding
2034
2,565,000
Series 2020
5,315,000
Fire station, sewer lines, wells
2040
4,925,000
Series 2021
5,790,000
Fire station, sewer lines, wells
2041
5,320,000
Series 2022
6,075,000
Water transmission main, plant and line improvements
2042
5,860,000
Series 2023
3,985,000
Water, sewer and street improvments
2043
3,705,000
Series 2024
10,075,000
Water, sewer and street improvements
2044
10,075,000
Series 2024 Refunding
2,995,000
Refunding
2033
2,995,000
Total General Obligation Bonded Debt Outstanding
53,180,000
$
Plus: The Bonds
5,340,000
Total General Obligation Bonded Debt to be Outstanding
58,520,000
$
*
*
13
Annual Debt Service Requirements of General Obligation Bonded Indebtedness To Be Outstanding. The District will
have the following estimated annual debt service requirements after the issuance of the Bonds:
TABLE 8
Schedule of Estimated Annual Debt Service Requirements (a)
* Subject to change.
(a)
Prepared by Stifel, Nicolaus & Company, Incorporated (the “Underwriter” or “Stifel”).
(b)
Interest is estimated.
(c)
The first interest payment on the Bonds will be due on January 15, 2026*. Thereafter, interest payments will
be made semiannually on July 15 and January 15 until maturity or prior redemption.
Total
Estimated
Bonds Outstanding
The Bonds*
Annual
Fiscal
Debt Service
Year
Principal
Interest
Principal
Interest (b)
2024/25
$1,995,000
$1,969,611
3,964,611
$
2025/26
2,005,000
2,098,681
95,000
$
$210,633
4,409,315
2026/27
2,090,000
2,014,331
-
262,250
4,366,581
2027/28
1,975,000
1,926,331
45,000
262,250
4,208,581
2028/29
2,055,000
1,844,731
50,000
260,000
4,209,731
2029/30
2,140,000
1,759,631
55,000
257,500
4,212,131
2030/31
2,225,000
1,677,781
55,000
254,750
4,212,531
2031/32
2,305,000
1,593,131
60,000
252,000
4,210,131
2032/33
2,400,000
1,498,563
65,000
249,000
4,212,563
2033/34
2,505,000
1,394,463
65,000
245,750
4,210,213
2034/35
2,610,000
1,290,863
65,000
242,500
4,208,363
2035/36
2,715,000
1,183,013
75,000
239,250
4,212,263
2036/37
2,830,000
1,072,163
75,000
235,500
4,212,663
2037/38
2,960,000
941,788
75,000
231,750
4,208,538
2038/39
3,095,000
805,200
80,000
228,000
4,208,200
2039/40
3,200,000
699,513
85,000
224,000
4,208,513
2040/41
3,325,000
572,713
90,000
219,750
4,207,463
2041/42
3,415,000
483,463
95,000
215,250
4,208,713
2042/43
3,585,000
316,988
95,000
210,500
4,207,488
2043/44
3,750,000
150,000
105,000
205,750
4,210,750
2044/45
4,010,000
200,500
4,210,500
53,180,000
$
5,340,000
$
Requirements*
(c)
14
OVERLAPPING, ADDITIONAL AND ADDITIONAL
OVERLAPPING INDEBTEDNESS
Overlapping General Obligation Bonded Indebtedness
Overlapping general obligation bonded indebtedness is shown below including a breakdown of each overlapping
jurisdiction’s applicable general obligation bonded indebtedness, Net Limited Assessed Property Value and combined
tax rate per $100 Net Limited Assessed Property Value. Outstanding bonded indebtedness is comprised of general
obligation bonds outstanding and general obligation bonds scheduled for sale. The applicable percentage of each
jurisdiction’s Net Limited Assessed Property Value which lies within the District’s boundaries was derived from
information obtained from the County Assessor. See “RISK FACTORS – Direct and Overlapping Indebtedness.”
TABLE 9
* Subject to change.
(a)
Includes total stated principal amount of general obligation bonds outstanding. Does not include outstanding
principal amount of certificates of participation, revenue obligations or loan obligations outstanding for the
jurisdictions listed above. Does not include outstanding principal amounts of various County and City
improvement districts, as the obligations of these districts are presently being paid from special assessments
against property within the various improvement districts.
Does not include presently authorized but unissued general obligation bonds of such jurisdictions which may
be issued in the future as indicated in the following table. Authorized but unissued amounts in the following
table may be subject to additional reductions based on net premium amounts but such reductions are not
reflected in the table. Additional bonds may also be authorized by voters within overlapping jurisdictions
pursuant to future elections.
General Obligation Bonds
Overlapping Jurisdiction
Authorized but Unissued
City of Buckeye
$282,000,000
The District
101,057,622 (f)*
2024/25
General
Proportion Applicable
Net Limited
Obligation
to the District (b)
Assessed
Bonded Debt
Approximate
Net Debt
Direct and Overlapping Jurisdiction
Property Value
Outstanding (a)
Percent
Amount
State of Arizona
88,425,611,337
$
None
0.15
None
Maricopa County (c)
58,328,686,358
None
0.23
None
$2.1556
Maricopa County Community College District
58,328,686,358
57,615,000
$
0.23
135,284
$
1.2257
Maricopa County Special Health Care District
58,328,686,358
544,135,000
0.23
1,277,664
0.2970
Western Maricopa Education
Center District No. 402
22,530,836,261
144,220,000
0.61
876,678
0.1579
Wickenburg Unified School District No. 9
295,989,533
6,800,000
46.27
3,146,478
2.1636
City of Buckeye
953,508,266
None
14.36
None
1.7671
The District
136,959,496
58,520,000
100.00
58,520,000
3.0749
Total Direct and Overlapping General Obligation Bonded Debt to be Outstanding (e)
63,956,104
$
Property Value
None
Assessed
2024/25 Tax
Rates Per $100
Net Limited
%
*
*
*
(d)
15
Also does not include the obligation of the Central Arizona Water Conservation District (“CAWCD”) to the
United States Department of the Interior (the “Department of the Interior”), for repayment of certain capital
costs for construction of the Central Arizona Project (“CAP”), a major reclamation project that has been
substantially completed by the Department of the Interior. The obligation is evidenced by a master contract
between CAWCD and the Department of the Interior. In April 2003, the United States and CAWCD agreed to
settle litigation over the amount of the construction cost repayment obligation, the amount of the respective
obligations for payment of the operation, maintenance and replacement costs and the application of certain
revenues and credits against such obligations and costs. Under the agreement, CAWCD’s obligation for
substantially all of the CAP features that have been constructed so far will be set at $1.646 billion, which
amount assumes (but does not mandate) that the United States will acquire a total of 667,724 acre feet of CAP
water for federal purposes. The United States will complete unfinished CAP construction work related to the
water supply system and regulatory storage stages of CAP at no additional cost to CAWCD. Of the $1.646
billion repayment obligation, 73% will be interest bearing and the remaining 27% will be non-interest bearing.
These percentages are fixed for the entire 50-year repayment period, which commenced October 1, 1993.
CAWCD is a multi-county water conservation district having boundaries coterminous with the exterior
boundaries of Maricopa, Pima and Pinal Counties. It was formed for the express purpose of paying
administrative costs and expenses of the CAP and to assist in the repayment to the United States of the CAP
capital costs. Repayment will be made from a combination of power revenues, subcontract revenues (i.e.,
agreements with municipal, industrial and agricultural water users for delivery of CAP water) and a tax levy
against all taxable property within CAWCD’s boundaries. At the date of this Official Statement, the tax levy is
limited to 14 cents per $100 of Net Limited Assessed Property Value, of which 14 cents is being levied. (See
Sections 48-3715 and 48-3715.02, Arizona Revised Statutes.) There can be no assurance that such levy limit
will not be increased or removed at any time during the life of the contract.
(b)
The County’s tax rate includes the $0.1400 tax rate of CAWCD, the $0.1470 tax rate of the Maricopa County
Flood Control District, the $0.0470 tax rate of the Maricopa County Free Library and the $0.0080 tax rate of
the Maricopa County Fire District contribution. It should be noted that the County Flood Control District does
not levy taxes on personal property.
(c)
Proportion applicable to the District is computed on the ratio of Net Limited Assessed Property Value for fiscal
year 2024/25.
(d)
Includes the Bonds. In addition to the rate for debt service on the Bonds, the District levies a tax of $0.30 per
$100 of Net Limited Assessed Property Value for the Operation and Maintenance Tax. Does not include special
assessment revenue bonds outstanding. See “Other Debt of the District” herein.
(e)
Totals may not add due to rounding.
(f)
Reflects reduction in authorization approved at the Election caused by issuance of the Bonds.
Source:
The various entities, Property Tax Rates and Assessed Values, Arizona Tax Research Association, State
and County Abstract of the Assessment Roll, Arizona Department of Revenue and the Treasurer of the
County.
* Subject to change.
[Remainder of page left blank intentionally.]
16
Additional General Obligation Bonded Indebtedness of the District
In addition to outstanding general obligation bonds of the District described in TABLE 7 and the Bonds, the District
retains the right to issue, in accordance with the procedures set forth in the Enabling Act, additional series of general
obligation bonds payable from ad valorem taxes. See “SECURITY FOR AND SOURCES OF PAYMENT – Ad
Valorem Property Taxation in the District – General Obligation Bonded Indebtedness to be Outstanding.” See also
“RISK FACTORS – Direct and Overlapping Indebtedness.”
The Enabling Act provides that the total aggregate outstanding amount of bonds and any other indebtedness for which
the full faith and credit of the District are pledged will not exceed 60 percent of the aggregate of the estimated market
value of the real property and improvements in the District after the public infrastructure of the District is completed
plus the value of the public infrastructure owned or to be acquired by the District with the proceeds of the bonds.
(Based solely on the Full Cash Value of the District as reported by the County Assessor, the Board has determined
that issuance of the Bonds will meet the test set forth above. See “SECURITY FOR AND SOURCES OF PAYMENT
– Ad Valorem Property Taxation in the District – Full Cash Value.”) In addition to the limitations described in the
Act, the District shall not incur general obligation debt in an amount greater than what could be incurred by the City
pursuant to the Arizona Constitution and Title 35 of the Arizona Revised Statutes; specifically the District may not
incur general obligation bonds in an amount greater than 26% of the net assessed value (full cash value, minus exempt
property, multiplied by the applicable percentage in A.R.S. § 42-15001, et seq.) of the real property in the District at
the time of issuance of the Bonds.
Pursuant to the Election, the District was authorized to incur general obligation bonded indebtedness in an amount not
to exceed $175,000,000 and will have $101,057,622* of such amount remaining after issuance of the Bonds in order
to finance, among other things, the costs of public infrastructure purposes within the District, including incidental
costs. Additional indebtedness could be authorized for the District in the future pursuant to other elections.
Additional Overlapping General Obligation Bonded Indebtedness
The District has no control over the amount of additional indebtedness payable from taxes on all or a portion of the
property within the District that may be issued in the future by other political subdivisions, including but not limited
to the City, the County, Wickenburg Unified School District No. 9 of Maricopa and Yavapai Counties, Arizona,
Western Maricopa Education Center District No. 402 of Maricopa County, Arizona, Maricopa County Community
College District or other entities having jurisdiction over all or a portion of the land within the District. Additional
indebtedness could be authorized for such overlapping jurisdictions in the future. See “RISK FACTORS – Direct
and Overlapping Indebtedness.”
[Remainder of page left blank intentionally.]
* Subject to change.
17
Other Debt of the District
To finance costs to acquire certain public infrastructure for development of land in the District, the District has issued
Special Assessment Revenue Bonds with the series designations, in principal amounts on the dates, with acreages of
land within the District assessed to pay debt service, with the assessment district numbers and with amounts assessed
per lot as described in the table below. All of the infrastructure financed with such bonds has been or will be dedicated
to the City.
TABLE 10
Series
Designation
Original
Principal
Amount
Date
Issued
Acres
Assessed
Assessment
District No.
Assessment
Per Lot
Total
Outstanding
2007
$1,868,000
04/04/2007
275.8
2 & 3
$2,000
$474,000
2007
1,784,000
10/17/2007
245.2
4 & 5
2,000
435,000
2009
356,000
11/19/2009
43.5
6
2,000
94,000
2011
404,000
04/07/2011
79.3
7
2,000
108,000
2013
186,000
07/31/2013
25.6
8
2,000
56,196
2015
288,000
07/21/2015
36.1
9
2,000
117,000
2016
200,000
03/24/2016
37.7
10
2,000
79,463
2017
2,738,000
02/16/2017
518.0
11
2,000
1,570,000
2018
210,000
02/07/2018
100.0
12
2,000
147,900
2018
3,920,000
11/01/2018
456.3
13
3,500
2,030,000
2019
722,000
02/21/2019
107.0
14
2,000
537,300
Other series of assessment bonds payable solely from and secured by special, separate funds established and
maintained by the District from installments due with respect to certain other special assessments may be issued by
the District in the future. The Board has authorized the issuance of additional assessment bonds of the District with a
principal amount not to exceed $_,___,___.
The term “special assessments” as used hereinabove refers to the assessments levied and assessed by the District in
the related assessment area which encompasses portions of the District, each of which would constitute a first lien on
the parcel so levied and assessed, subordinate and subject only to general property taxes (including that for the Bonds)
and prior special assessments. If a lot owner fails to pay an assessment installment when due, the lot can be offered
for sale by the District for the amount of the assessment together with interest, costs and penalties. Neither the District
nor the City is obligated to bid at the sale. The lien for the property taxes levied to pay the Bonds is senior to the lien
of such assessments; however, the lien for such assessments is not extinguished by foreclosure with regard to taxes.
There can be no assurance that additional amounts of such bonds payable from special assessments will not be issued
in the future, increasing the amount of liens on property in the District for such purposes. See “RISK
FACTORS - Direct and Overlapping Indebtedness.”
LAND DEVELOPMENT
The information contained in this section relates to and has been obtained from the
Developer, unless otherwise sourced or noted, and neither the District, nor the Financial
Advisor, nor the Underwriter assumes any responsibility for the accuracy or completeness
thereof. The information included under the heading “RISK FACTORS” as it relates to the
information contained under this heading is hereby incorporated under this heading by this
reference.
In General
The District consists of approximately 4,015 acres being planned and developed as a mixed-use, master-planned
community. The District is located approximately 35 miles northwest of downtown Phoenix, Arizona, in the northern
18
portion of the City, approximately 17 miles north of Interstate 10 on the Sun Valley Parkway. The District is
approximately nine miles west of current development within the City of Surprise, Arizona, along the Sun Valley
Parkway. See the map on page (iv) and the aerial photograph on page (v). The Developer’s current production
operations within the District consist of 3,308 of the 4,015 acres within the District marketed as “Festival Ranch” (the
“Project” or “Festival Ranch”), composed of an “age restricted” residential community marketed as “Sun City
Festival” and a “conventional” community marketed as “Festival Foothills.” Limited commercial development has
been undertaken by other owners within the District.
The Developer acquired its portion of the property in the District in October 2004, having commenced entitlements
and pre-development prior to closing. Construction of infrastructure improvements and certain amenities commenced
in August 2005, and the first residential sales closed in 2006. Since that time, the Developer has spent approximately
$430,000,000 to provide water, sewer, streets, curbs, gutters, a golf course, a recreation centers, an arts and crafts
center, baseball fields and other facilities and has continued to ready additional property it owns in the District for
residential and commercial development. The Developer also has continued to market and sell its varied residential
products. Overall, the Developer has commenced and/or completed improvements to approximately 2,200 acres of
the property it owns in the District. See “Residential Development” in this section and “THE PUBLIC
INFRASTRUCTURE.”
While other entities own approximately 707 acres of land in the District outside of the Project, the Developer has no
knowledge as to when, if ever, such other owners will be developing their property in the District. The Developer is
the only homebuilder that owns land within the District.
Land Development Agreements/Community Master Plan
The real property in the District is subject to a Development Agreement with the City, dated October 4, 2000 (the
“Land Development Agreement”), which addresses the rights of, among others, owners to develop property in the
District as provided in and subject to the conditions of such agreement. The Land Development Agreement has been
modified by way of several recorded amendments and references herein to the Land Development Agreement mean
such agreement as amended. The Land Development Agreement addresses various issues often times made the subject
of development agreements in Arizona, such as, among other things, City services, reimbursements to the Developer
for certain public infrastructure, the City’s processing of plans and permits, and public bidding. The Land
Development Agreement and certain subsequent agreements also address the legal right to obtain, and the legal
obligation to provide, potable water and the required capital and operations contributions to the City for water, sewer,
police and fire services within the District. Police, fire and sanitation services are provided to the District by the City.
The Developer is obligated to assist in the funding of certain capital and operational costs associated with the provision
of water, sewer, police and fire protection for the real property in the District that is subject to the Land Development
Agreement. The City has determined that the Developer has achieved the level of progress and completion required
by the Land Development Agreement for continued development under and in accordance with the same, and has
determined that the Land Development Agreement will continue in full force and effect for its entire term. The real
property in the District is also subject to a Development, Financing Participation and Intergovernmental Agreement
No. 1 by and among the City, the District and, among others, the Developer, relating to the formation and operation
of the District.
The real property in the District is subject to a community master plan originally approved by the City on October 4,
2000 (the “Community Master Plan”). Several amendments to the Community Master Plan have been adopted by the
City. The latest amendment, which added certain areas owned by the Developer to the Community Master Plan and
the Land Development Agreement, was executed on October 21, 2008. References to the Community Master Plan
mean such plan as amended. The Community Master Plan covers substantially more property than the property in the
District. A Community Master Plan Amendment and Area Plan, which includes the property within the District, was
adopted by the City on June 17, 1997, and was last updated December 2, 2021, for Planning Unit F, which is west of
Wagner Wash.
Although the number of acres devoted to each particular land use may ultimately vary from those presented, the
development of the District in accordance with the Community Master Plan by the Developer and other owners is
currently expected to include the following land uses:
19
TABLE 11
Total Project
Approximate
District Acres
Single Family Residential
3,190
Golf Courses and Recreation Centers
475
Commercial
350
Total
4,015
The Community Master Plan allows 14,226 residential units within the District, the majority of which are planned as
single family residences. The Community Master Plan also allows development of approximately 7.3 million square
feet of commercial space within the District if the Developer or other owners choose to develop that amount of
commercial space. Development of the property within the District and construction of homes and other infrastructure
is subject to obtaining various additional development and construction approvals and permits. As a condition to the
sale of homes, homebuilders will be required to obtain building permits and any additional permits required for the
construction and completion of all such homes and other infrastructure. See “RISK FACTORS.”
Additional Entitlements
Development in areas with significant natural drainage such as Festival Ranch often requires the United States Army
Corps of Engineers (“USACE”) to determine if any such drainage areas are within the USACE’s jurisdiction. If any
drainage areas are in USACE’s jurisdiction, a “Section 404” permit would be required to allow development or
disturbance of such drainage areas. In December 2011, USACE approved the Jurisdictional Determination (the
“Determination”) as submitted by the Developer indicating that only Wagner Wash in Festival Ranch is within
USACE’s jurisdiction. Since no additional development in Wagner Wash is anticipated within the defined
Determination, no “Section 404” permit is required. The Determination is valid for five years and can be extended
upon request and application for additional years. The Developer has obtained an extension of the Determination for
an additional four years (until 2025). Due to updated requirements, for projects like Festival that have non-permanent
waters, no further delineation or permit is required. There can be no assurance that requirements will not change in
the future, or any future extension will be granted as and when requested.
Even with the approved Community Master Plan, development still requires certain approvals from the City for
preliminary and final plats prior to construction of improvements. To date, the Developer has recorded 52 final plats
(not including replatting of existing final plats) that include over 6,100 lots within the District. The Developer also
has obtained approval of preliminary plats for approximately 850 additional residential lots on property within the
District. Combining preliminary plats and final plats there are approximately 7,000 entitled lots. Of those lots
included in final plats, approximately 5,900 have been improved with utilities and paved streets, and of those, 5,610
have had homes constructed and closed on them as of March 31, 2025, while the balance of those lots (approximately
290 lots) are ready and available for immediate residential construction or have homes under construction on them.
The Developer is in the process of completing improvements to a number of parcels that have final plats. The
Developer is in the process of obtaining final plats for the lots which are subject to preliminary plats. See “RISK
FACTORS.”
[Remainder of page left blank intentionally.]
20
In December 2021, the Developer received final City Approval of a Community Master Plan Amendment for what
the Developer calls Planning Area Three. All existing development to date has been in Planning Areas One and Two.
Mass grading has begun within Planning Area Three, which is west of existing development on the west side of
Wagner Wash, but is within the District. There can be no assurances that such development in Planning Area Three
will be completed or that sales will commence as planned.
Residential Development
The Developer is responsible for the construction of all offsite infrastructure and subdivision improvements necessary
to deliver fully finished lots. The “active adult” residences currently constructed by the Developer range in size from
1,573 to 2,736 square feet; and such homes are priced from $351,990 to $598,990 prior to purchaser-selected upgrades.
There are currently no conventional residences or lots available for sale within conventional development areas.
Developer is working to open new areas for conventional homes. The following table shows the number of “active
adult” and “conventional” home sales the Developer has closed for the periods indicated:
TABLE 12
Calendar
Year
Active Adult
Home Closings
Conventional
Home Closings
Total Residential
Closings Per Year
2006
143
0
143
2007
578
83
661
2008
318
184
502
2009
204
67
271
2010
120
46
166
2011
105
19
124
2012
129
0
129
2013
169
21
190
2014
164
25
189
2015
149
65
214
2016
168
95
263
2017
168
105
273
2018
221
117
338
2019
2020
2021
2022
2023
2024
2025 (a)
258
284
285
342
280
217
40
106
164
173
4
0
0
0
364
448
458
346
280
217
40
Cumulative Totals
4,342
1,274
5,616
(a)
Through March 31, 2025. As of March 31, 2025, there were approximately 136 homes under construction
in the District.
The Developer operates one model home complex located in Sun City Festival. The 27-hole Copper Canyon Golf
Course is owned and operated by the homeowners association for Sun City Festival and a 31,000+/- square foot
recreation center, a 15,000+/- square foot restaurant/clubhouse/cart barn, a softball complex, a 9,000 square foot arts
and crafts center and related recreational amenities are also complete within Sun City Festival and will be owned and
operated by the same homeowners association. The golf course and related facilities are operated by the homeowners
association, which is subsidized in part by the Developer. Festival Foothills includes a 12+/- acre neighborhood park,
splash pad, and a linear park with trails throughout. Construction on a new model complex and a 9-hole golf course
in the area of the Project south of the Sun Valley Parkway and the new 25,000+/- square foot Saguaro Recreation
Center has been completed.
21
THE PUBLIC INFRASTRUCTURE
The information contained in this section relates to and has been obtained from the
Developer, unless otherwise sourced or noted, and neither the District, nor the Financial
Advisor, nor the Underwriter assumes any responsibility for the accuracy or completeness
thereof. The information included under the heading “RISK FACTORS” as it relates to the
information contained under this heading is hereby incorporated under this heading by this
reference.
In addition to the infrastructure described under the heading “OVERLAPPING, ADDITIONAL AND ADDITIONAL
OVERLAPPING INDEBTEDNESS – Other Debt of the District,” certain infrastructure is being constructed in
connection with the development and construction of residential and commercial development as described hereinbelow.
Except as set forth under the heading “PUBLIC INFRASTRUCTURE FINANCED BY THE BONDS,” none of such
infrastructure is being financed with proceeds of the sale of the Bonds or proceeds of prior general obligation bond
issuances, but instead will be financed by the Developer and may be the subject of acquisition from proceeds of future
bond offerings by the District.
Water Reclamation Facility
Current plans for sewer service within the District call for a multi-phase water reclamation facility (the “WRF”) which
is designed to handle all development within the District. The first phase of the WRF (the “First Phase”) is now owned
and operated by the City. This facility may be constructed in multiple phases and it is intended to be turned over to
the City in phases as constructed. The City has also secured approval of an increase in the service area of the WRF,
known as a Maricopa Association of Governments 208 Amendment, that allows service to areas outside the District
and allows for a significant increase in the size of the WRF in the future. The primary effluent discharge method is
direct reuse of treated effluent for irrigation purposes on the golf courses. Such discharge is currently being used by
the City but the quantity available is still less than the total golf course irrigation demand. Some effluent is discharged
to Wagner Wash if it cannot be reused directly on the golf courses. Until additional effluent is available, the golf
courses will be irrigated in part with a portion of the CAP water leased by the Developer from other parties. CAP
water originates from the Colorado River and is subject to future shortages as declared by the United States. Such
shortages could reduce the overall water supply available for golf course irrigation until enough effluent is generated
to replace CAP water used today. The Developer and certain other owners of property inside and outside of the
District have entered into a joint development agreement for the cooperative development of future phases of the
WRF. Pursuant to such joint agreement, the Developer has the right to construct additional phases for its own accord
if need be. The Developer is also negotiating with the City for agreements and permits necessary for the Developer
to construct and convey to the City an underground water storage facility (the “Recharge Facility”) near the WRF and
within a portion of Wagner Wash that will replenish the underground aquifer with treated effluent not used within the
golf course, or other available CAP water supplies.
The First Phase is able to service approximately 7,000 residential units within the District based on actual flows
experienced at the WRF. Current development plans include commencement of planning and construction of the
second phase (an additional one million gallons per day capacity to be planned and constructed in two phases of
500,000 gallons per day each). An engineering firm has been hired to complete plans and to assist in permitting, with
construction to commence, as soon as plans and approvals are received from applicable governmental authorities. The
actual number of units which can be served will depend in part on whether the unit is an age restricted (active adult)
or conventional unit. Active adult units generally have fewer residents per unit and generate less wastewater on a
gallons per day basis than conventional units. Based upon residential sales to date, there should be sufficient sewer
capacity in the First Phase for approximately 1,000 additional residences without construction of any additional
expansion phases of the WRF, depending upon the split of usage between active adult and conventional uses. The
Developer commenced the process to obtain plan approval and licensing for a second phase of the WRF. The
Developer will seek to obtain approvals and licenses by year end. Thereafter, the Developer plans to commence
construction of the second phase of the WRF with completion anticipated during the fourth quarter of 2027. There can
be no assurance licensing and construction of phase 2 of the WRF will be completed as planned.
22
Water Production Campus
Water service for the District is provided by three water production campuses operated by the City. The first water
production campus (Water Plant #1 and Well #1), is located at the southeast corner of Desert Vista Boulevard and
Beardsley Parkway. The second water production campus (Well #2) is located approximately one quarter mile west
of Water Plant #1. The third water production plant (Well #3) is located approximately one quarter mile north of the
Water Plant #1. Water Plant #1 has 2.4 million gallons of total storage (constructed in two phases of 1.2 million
gallons), and contains a production well and booster pumps. The timing of further facilities will be dependent upon
demand, market conditions, and physical water source characteristics. As with wastewater usage and capacities, there
is also a difference in the water demand between active adult and conventional units, with active adult units utilizing
significantly less water on a gallons per day basis. All Arizona Department of Water Resources (“ADWR”) permits
and approvals have been secured for the three existing well facilities. Construction of Water Plant #1 and the three
production wells have been substantially completed. The Developer has completed drilling a fourth well and such
well is now being equipped for production. The fourth well will also require water treatment improvements to be
added to the system. The fourth well is anticipated to come on line by the end of 2025. The current water system is
capable of supporting approximately 5,328 active adult and 1,274 conventional residential units.
Assured Water Supply
Future subdivision plats within the Project will require an assured water supply to be demonstrated through either a
Certificate of Assured Water Supply (a “Certificate”) or a future City of Buckeye Designation of Assured Water
Supply (a “Designation”). While the City is pursuing a Designation, but currently, the City is not designated as
having an assured water supply service area pursuant to applicable Arizona law and there can be no assurance as to
when, or if, the City will receive such Designation. However, the City has submitted an application with ADWR to
obtain such Designation. If the City receives such Designation, the City may utilize Developer water sources to supply
water to property owned or developed by the Developer in the District. Until the City receives such Designation, in
order to plat, subdivide and sell lots, owners of property in the District must obtain a Certificate for each subdivision plat
from ADWR. Obtaining Certificates based upon a local groundwater source requires, among other things, (i) a
hydrology study supporting determinations that sufficient water will be continuously available to satisfy the water
needs of the proposed use for at least 100 years, (ii) that any projected groundwater use is consistent with the water
management plan approved by ADWR through enrollment of the Project in the Central Arizona Groundwater
Replenishment District, (iii) achievement of the management goal for the area, and (iv) that the financial capability
to construct the delivery system exists. Requirements for new Certificates not based upon local groundwater may
have different or additional requirements to demonstrate availability of water for assured water supply purposes.
The District lies within the Lower Hassayampa Groundwater Sub-Basin. Property already subdivided within the
District is expected to be served primarily from groundwater from the Lower Hassayampa Groundwater Sub-Basin.
On January 22, 2004, based upon the groundwater hydrologic model used at that time, ADWR issued an Analysis
of Assured Water Supply (the “Analysis”) for the property within the District. In the Analysis, ADWR determined
that 7,690 acre feet per year of groundwater will be physically available for 100 years, which is equivalent to the
projected build-out demands for the District. The proposed development evaluated by ADWR includes 3,208 single
family residential lots, 9,018 active adult single family residential lots, 1,450 multi-family residential units and 1,122
nonresidential acres containing commercial areas, a hospital, schools, parks, rights of way, a community center,
easements, and golf courses. Reclaimed water is also available for reuse as the community grows and produces
more wastewater.
The Analysis was used to demonstrate the physical availability of groundwater in support of prior applications for
Certificates. With respect to the property covered by the Analysis, six Certificates were issued by ADWR. The first
was issued November 23, 2004, for 3,473 lots, with an estimated water demand of 2,130.14 acre feet per year. The
second was issued May 7, 2006, for 819 lots, with an estimated water demand of 608.72 acre feet per year. The
third was issued on February 5, 2009, for 608 lots with an estimated water demand of 646.81 acre feet per year. The
fourth was issued on April 8, 2009, for 259 lots with an estimated water demand of 258.63 acre feet per year. The
fifth was issued on March 7, 2018, for 361 lots with an estimated water demand of 175.42 acre feet per year. The
sixth was issued on May 8, 2018, for 1,199 lots with an estimated water demand of 836.51 acre feet per year.
On November 13, 2012, an extension of the Analysis was issued by ADWR, which acknowledged the existing
23
Certificates that were previously issued (3,644.30 acre feet per year to be physically available for 100 years). An
extension of the original Analysis was granted until January 22, 2024, and established that the remaining
groundwater capacity of 4,045.70 acre feet per year should be available for future applications. The extension also
indicated that all other conditions of the original Analysis should continue to apply. An additional extension of the
original Analysis was granted April 12, 2024, which lasts for five more years ending on January 22, 2029.
On January 26, 2021, two new applications for Certificates were submitted for Sun City Festival Parcel AA1 and
Festival Ranch Planning Area 3 PUP E Parcels 33, 35, 84, and 88. Both applications relied upon the 2004 Analysis as
proof of groundwater availability. On June 25, 2021, while the two applications were pending, ADWR sent letters to
the applicant, indicating that ADWR was finalizing a numerical groundwater flow model for the Hassayampa sub-
basin, and that ADWR believed the new model would demonstrate there was not 100 years’ of groundwater available
for the pending Certificates. ADWR released the new Hassayampa sub-basin groundwater model in January 2023,
and the initial model results indicate that, under ADWR’s policies, no further Certificates may be issued using local
groundwater as the source of water. However, on October 2, 2024, based on further review, ADWR approved the two
new applications and issued Certificates for the referenced Parcels. Those newly issued Certificates provided for a
total of 246 Lots and 558 Lots, respectively, for a total of 804 additional Lots.
ADWR released an updated Phoenix Active Management Area groundwater model that includes the Hassayampa
Sub-Basin in June 2023, with a baseline result showing continued deficits in the available 100-year groundwater
supply for new subdivisions. A developer may update the model assumptions to adjust the model results and request
that ADWR review the updated assumptions and results, but there can be no assurance as to whether any additional
groundwater will be determined to be available for new subdivisions by ADWR for any new applications for
Certificates for any future subdivisions within the Project. A developer may secure a non-groundwater source of water,
but a new water supply may be costly, take months or years to secure, or not be feasibly available. Failure to obtain
approval of future additional Certificates based upon local groundwater or an imported source of water could cause
significant limitations on, or halt, future development within the District. There is no guarantee that securing new non-
groundwater supplies will be achievable within a predicted timeframe or even feasible. Failure to secure additional
Certificates in the future could significantly increase future development costs or decrease future development in the
Project.
While additional dialogue with the ADWR over adjustments to the new groundwater model are continuing,
maintaining sufficient water supplies in the Lower Hassayampa Groundwater Sub-Basin will likely require efforts to
supplement the groundwater supply through purchase of water for use or storage of water in the Recharge Facility.
The cost of new water supplies, associated infrastructure, and facilities for effluent recharge and reuse are substantial.
Failure to secure new water supplies may prevent issuance of additional Certificates and may also prevent the City’s
Designation. Such failure may, in turn, prevent further subdivision development. As to subdivisions that have already
made a successful demonstration of an assured water supply, ADWR may revoke a Certificate if an assured water
supply does not exist, but cannot revoke a Certificate if any of the residential lots within the plat have been sold. As
to the Certificates issued November 23, 2004, for 3,473 lots, May 7, 2006, for 819 lots, February 5, 2009, for 608 lots,
April 8, 2009, for 259 lots, March 7, 2018, for 361 lots and May 8, 2018, for 1,199 lots at least one lot has been sold
in all such areas. The new Certificates issued for 558 Lots and 246 Lots, respectively, are being processed for
development so lot sales can be made which will vest the new Certificates. While revocation by ADWR appears
unlikely, there can be no assurance that such lot sales will be accomplished prior to a revocation by ADWR. Loss of,
or inability to obtain, necessary Certificates would have adverse effects on development of additional land within the
District and on repayment of the Bonds. See “RISK FACTORS - Completion of the Public Infrastructure and the
Other Infrastructure.”
Streets/Water and Sewer Lines
The Developer plans to construct on property it owns within the District all required arterial and collector roads
(including related landscaping), all sewer trunk lines and any required wastewater treatment, and all water distribution
and water supply facilities.
Completed improvements include the following: approximately 47,598 linear feet of trunk sewer, approximately
78,390 linear feet of water supply and distribution lines, storm drain, paving and concrete on (i) Canyon Springs
Boulevard from Sun Valley Parkway past Beardsley Parkway to Tina Lane; (ii) Desert Vista Boulevard from
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Beardsley Parkway in Festival Foothills past Canyon Springs Boulevard looping back to Beardsley Parkway in Sun
City Festival; (iii) Mountain Ridge Boulevard from Desert Vista Boulevard to Desert Oasis Boulevard; (iv) Desert
Oasis Boulevard from Sun Valley Parkway to Beardsley Parkway; (v) Beardsley Parkway from Desert Vista in Sun
City Festival to Desert Vista in Festival Foothills; (vi) Desert Vista Boulevard from Beardsley Parkway to Firehawk
Drive; (vii) and Beardsley Parkway from Desert Vista Boulevard to Desert Oasis Boulevard. Construction of future
roadways will be dependent on existing roadway capacities and the need to provide safe vehicular access within the
District.
Approximately 22,100 linear feet of arterial roadway (4.19 miles) and 22,485 linear feet of collector roadway (4.25
miles) have been constructed in the District by the Developer. Such infrastructure also includes approximately
193,217 linear feet of local streets (36.59 miles). Such “public infrastructure” was completed as of March 2023, and
has been or will be dedicated to the City.
The Developer has, or plans in the future to, publicly bid the improvements outlined above and plans to pay for the
construction of same. The Developer anticipates that these improvements will be eligible to be reimbursed from future
bond offerings by the District.
Police and Fire
A joint police and fire facility (the “Public Safety Building”) is located at the southwest corner of Desert Oasis
Boulevard and Beardsley Parkway. The approximately $6,200,000 facility was constructed jointly by the City and
the Developer, with funding provided by both parties.
Other
Electrical service for the District is provided by Arizona Public Service Company. Telephone and data service is
provided by Cox Communications and Zona Communication. Cable television service is provided by Cox
Communications.
The District is located in Wickenburg Unified School District No. 9. A K-8 school is located within Festival Foothills.
This elementary school opened in the Fall of 2008. High school students attend Wickenburg High School.
The District receives primary vehicular access from Sun Valley Parkway. Provisions for arterial and collector
vehicular access provide additional access within property subject to the District. A feasibility study is being prepared
by the Maricopa County Department of Transportation regarding the location of a proposed parkway connecting
Highway 85 to State Route 74 and Highway 60. Depending upon the results of such study, additional access may be
available to the property in the District. However, representatives of the Developer are currently unsure of the final
location of the proposed parkway.
PUBLIC INFRASTRUCTURE FINANCED BY THE BONDS
The information contained in this section relates to and has been obtained from the
Developer, unless otherwise sourced or noted, and neither the District, nor the Financial
Advisor, nor the Underwriter assumes any responsibility for the accuracy or completeness
thereof. The information included under the heading “RISK FACTORS” as it relates to the
information contained under this heading is hereby incorporated under this heading by this
reference.
Proceeds of the Bonds will be used, and proceeds of prior general obligation bond issuances have been used, to finance
certain public infrastructure (the “Public Infrastructure Financed by the Bonds”), which is comprised of approximately
47,598 linear feet of trunk sewer lines constructed throughout the District and approximately 22,100 linear feet of
arterial roadway (4.19 miles) and 22,485 linear feet of collector roadway (4.25 miles) constructed in the District,
including landscaping, approximately 193,217 linear feet of local streets (36.59 miles), Water Plant #1 and Wells #1,
#2 and #3, approximately 78,390 linear feet of water line, approximately 49,500 linear feet (9.4 miles) of reclaimed
water lines, the WRF, a portion of the Public Safety Building and related facilities. The Public Infrastructure Financed
by the Bonds was completed in or prior to 2025, and has been or will be dedicated to the City. The total estimated
cost of the Public Infrastructure Financed by the Bonds is greater than the amount to be available from proceeds of
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the sale of the Bonds; the balance of the cost of the Public Infrastructure Financed by the Bonds has been paid by
Developer. Unreimbursed costs of Public Infrastructure Financed by the Bonds may be eligible to be reimbursed by
the sale of bonds by the District in the future should the District elect to issue such additional bonds.
DEVELOPER
The information contained in this section relates to and has been obtained from the
Developer, and neither the District, nor the Financial Advisor, nor the Underwriter assumes
any responsibility for the accuracy or completeness thereof. The information included under
the heading “RISK FACTORS” as it relates to the information contained under this heading
is hereby incorporated under this heading by this reference.
Effective December 31, 2016, Pulte Home Corporation, a Michigan corporation, became Pulte Home Company, LLC,
a Michigan limited liability company, by conversion of the former Michigan corporate entity into the current Michigan
limited liability company entity, along with the corresponding name change from Pulte Home Corporation to Pulte
Home Company, LLC. The Developer remains a wholly-owned subsidiary of PulteGroup, Inc. (“PulteGroup”).
PulteGroup is subject to reporting the information required by the Securities and Exchange Act of 1934, as amended,
and in accordance therewith files the Filings with the Commission. The Filings may be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and
Northwestern Atrium Center, 400 West Madison Street, Suite 1400, Chicago, Illinois. Copies of the Filings can be
obtained from the public reference section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. In addition, the Filings may also be inspected at the offices of the New York Stock Exchange at 20
Broad Street, New York, NY 10005. The Filings may also be obtained through the Internet on the Commission’s
EDGAR database at http://www.sec.gov. None of the District, the Financial Advisor, Gust Rosenfeld P.L.C. (“Bond
Counsel”), the Underwriter or counsel to the Underwriter has examined the information set forth in the Filings for
accuracy or completeness, nor do they assume responsibility for the same. PulteGroup operates in more than 900
communities across 29 states and the District of Columbia, and serves all major customer segments through its family
of brands that includes Pulte Homes, Centex and Del Webb.
RISK FACTORS
Investment in the Bonds involves a significant degree of risk and is speculative in nature. The Bonds will be
secured solely by ad valorem property taxes to be levied on all taxable property within the boundaries of the
District. THIS SECTION SETS FORTH A BRIEF SUMMARY OF SOME OF THE PRINCIPAL RISK FACTORS IN
INVESTING IN THE BONDS. PROSPECTIVE INVESTORS SHOULD FULLY UNDERSTAND AND EVALUATE
THESE RISKS, IN ADDITION TO THE OTHER FACTORS SET FORTH IN THIS OFFICIAL STATEMENT, BEFORE
MAKING AN INVESTMENT DECISION. INVESTMENT IN THE BONDS SHOULD BE MADE ONLY AFTER
CAREFUL EXAMINATION OF THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICES HERETO. This
discussion of risk factors is not, and is not intended to be, exhaustive, and such risk factors are not necessarily
presented in the order of their magnitude.
General Risks of Real Estate Investment and Development; Certain Factors Which May Adversely Affect
Development; Consequences
Investments in developing real estate such as undeveloped areas in the District are generally considered to be
speculative in nature and to involve a high degree of risk. Owners of land in the District will be subject to the risks
generally incidental to real estate investments and development including those described herein.
Construction of houses on the lots within the District may be affected by changes in the income tax treatment of real
property ownership; changes in national, regional and local market and economic conditions; changes in long and
short term interest rates; changes in the climate for real estate purchases; changes in demand for or supply of competing
properties; unanticipated development costs, market preferences and architectural trends; unforeseen environmental
risks and controls; the adverse use of adjacent and neighboring real estate; changes in interest rates and the availability
of mortgage funds and homeowners insurance to buyers of the homes to be built in the District, which may render the
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sale of such homes difficult or unattractive; acts of war, terrorism or other political instability; delays or inability to
obtain governmental approvals; pandemics or epidemics; changes in laws; moratorium; force majeure (which may
result in uninsured losses); strikes; labor shortages; energy shortages; material shortages; inflation; climate change;
adverse weather conditions; subcontractor defaults; and other unknown contingencies and factors beyond the control
of the owners of such land. Land development within the District also could be affected adversely by changes in
governmental policies, including, but not limited to, governmental policies to restrict or control development. The
Developer is experiencing supply chain issues currently affecting the national economy, specifically the timely
availability of materials necessary to build new homes. While advantage is being taken of all available alternatives,
completion of homes has been slowed. This circumstance is expected to continue for the near term and to affect home
closings.
The residential development business, particularly with respect to communities such as that within the boundaries of
the District, is highly competitive in the Phoenix metropolitan area. The business of merchant builders building in the
District will face competition from a number of competitors in the City and other developments throughout the
Phoenix metropolitan area, many of which offer or intend to offer lots and parcels in similar communities to a similar
target market.
Decreased absorption rates associated with future economic slowdowns could adversely affect land values and reduce
the ability or desire of the property owners to pay ad valorem property taxes and assessments. In that event, there
could be a default in the payment of principal of and interest on the Bonds.
Vacant lots also provide less security to the holders of the Bonds should it be necessary for the District to foreclose
due to nonpayment of ad valorem taxes. An inability to develop the remaining land within the District would likely
reduce the diversity of ownership of land within the District, making the holders of the Bonds more dependent upon
timely payment of the ad valorem taxes levied on the vacant lots.
Development requires obtaining a variety of governmental approvals and permits. Such approvals and permits are
necessary to initiate construction and to allow the sale and occupancy of homes and to satisfy conditions included in
the approvals and permits. There can be no assurance that all of these permits and approvals can be obtained or that
the conditions to the approvals and permits can be fulfilled. The failure to obtain any of the required approvals or
fulfill any one of the conditions could cause materially adverse financial results.
Failure or Inability to Complete Proposed Development
The development of land in the District will be staged so that only a particular phase is planned to be developed at one
time. Funding for development of property in the District will be provided by third-party lenders, the Developer and
other sources. The availability of funding for the completion of Sun City Festival and Festival Foothills will depend
upon the demand for residential lots or units within such communities and local, regional and national market and
economic conditions. No assurance is given that funding will be obtained for development of property in the District,
or, if obtained, will be in an amount sufficient to complete development of Festival Foothills and Sun City Festival.
If satisfactory funding is unavailable, the Developer may be required to delay or suspend completion of the
development of the balance of Sun City Festival and Festival Foothills.
Public and private on-site and off-site improvements may increase the public and private debt for which the land
within the District is security. The burden of additional debt would be placed on the land within the District to
complete the necessary improvements. See “Direct and Overlapping Indebtedness” herein.
Completion of the Public Infrastructure and the Other Infrastructure
The assessed valuation of the taxable property in the District may increase if and as the development of the Project
continues. However, less than expected increases or decreases in the future assessed valuation of the taxable property
in the District may reduce the willingness of landowners to pay the ad valorem property taxes securing the Bonds or
adversely affect the interest of potential buyers of such property at any foreclosure sale for purposes of paying such
taxes. See also “SECURITY FOR AND SOURCES OF PAYMENT - Ad Valorem Property Taxation in the District.”
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The construction of infrastructure for development of the land in the District is not yet complete. See “LAND
DEVELOPMENT” and “THE PUBLIC INFRASTRUCTURE.” The cost and time for completion of all of such
improvements is uncertain and may be affected by changes like those described hereinabove. If cost overruns result
in delay of construction, or if other delays are experienced, sale of lots and construction of homes may be delayed.
Failure or inability to complete proposed development including development of necessary utilities could affect
adversely development of the land in the District.
Sale of Portions of the Land in the District
It is possible that the Developer or other land owners within the District may sell portions of their land to other owners.
Such new owners may not develop their land on the same schedule as the Developer or the other land owners, thus
slowing the pace of growth and delaying increases in assessed valuation.
Lack of Availability of Utilities and Water
Water and sewer service to the District will be provided by the City as described under the subheading “THE PUBLIC
INFRASTRUCTURE.” Failure or inability to complete proposed development, including development of necessary
utilities could adversely affect, delay or halt future development of land in the District. See “Failure or Inability to
Complete Proposed Development” herein. Certain utilities are to be developed by the City pursuant to certain
development agreements including as described above. There can be no assurances that such utilities will be financed
and developed. In addition, while 100 years of water supply was proven available to existing subdivisions within the
Project, ADWR’s change of the predictive groundwater model indicates that the Developer may need to secure new,
more expensive water supplies to support future subdivision entitlement. Based on the current status, there can be no
assurance that Developer will be able to obtain the additional Certificates needed to authorize future subdivision plats.
Failure to obtain approval of additional Certificates could cause significant limitations on, delay, or halt, future
development within the District. Alternatively, such failure could significantly increase future development costs.
Effect of Valuation of Property
Information is provided herein with respect to the valuation of land within the District. See “SECURITY FOR AND
SOURCES OF PAYMENT - Ad Valorem Property Taxation in the District.” Such valuation, and particularly
decreases therein, may reduce the willingness of landowners to pay the ad valorem taxes securing the Bonds, as well
as adversely affect the interest of potential buyers of such property at any foreclosure sale for purposes of paying such
taxes.
Direct and Overlapping Indebtedness
The ability of an owner of land within the District to pay its ad valorem taxes could be affected by the existence of
other taxes and assessments imposed upon the property, including special assessment bonds. The District and other
political subdivisions whose boundaries overlap those of the District could, without the consent of the District and, in
certain cases, without the consent of the owners of the land within the District, impose additional ad valorem taxes or
assessment liens on the property within the District in order to finance public improvements to be located inside or
outside of the District. (The existing public debt relating to the District is set forth in “OVERLAPPING,
ADDITIONAL AND ADDITIONAL OVERLAPPING INDEBTEDNESS.”) The lien created on the property within
the District through the levy of ad valorem taxes would be on a parity with that for the ad valorem taxes securing the
Bonds. The imposition of additional parity liens, junior liens, in the case of special assessments, or even private
financing, may reduce the ability or willingness of the owners of land within the District to pay the ad valorem property
taxes securing the Bonds. In that event, there could be a default in the payment of the Bonds.
From time to time there are legislative proposals in the Arizona Legislature that, if enacted, could alter the basis on
which ad valorem taxes (including those that secure the Bonds) are assessed, levied and collected and which could
affect, among other things, the distribution of the amount of taxes various classifications of property may be obligated
to pay. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it
would affect the Bonds or other obligations issued prior to enactment.
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Tariffs
On April 2, 2025, President Trump announced new tariffs on several nations. On April 9, 2025, President Trump
announced a 90-day pause on some of the tariffs, with the exception of certain tariffs on China. As of the date of this
Official Statement, none of the City, the District or the Developer are able to predict the impacts of these tariffs, if
any, applicable to the development of the Project. The risk of higher costs for the development of the Project and
construction of residential homes does not exists. This risk would be due to the increases in the cost of materials for
development of the Project. In connection with tariffs, none of the City, the District or the Developer are able to
predict the impact, if any, on supply chain disruptions for materials. To the extent there are increased costs incurred
by the Developer, the Developer anticipated that such increased costs would be passed through to homebuyers. As of
the date of this Official Statement, the Developer is unable to predict the impact, if any, of increased home prices due
to tariffs, but it may result in less home sales or generally slower development of the Project.
Bankruptcy and Foreclosure Delays
The payment of the ad valorem taxes securing the Bonds and the ability of the District to foreclose the lien of
delinquent, unpaid, ad valorem taxes may be limited by bankruptcy, insolvency or other laws generally affecting
creditors’ rights or by the laws of the State relating to judicial foreclosure. Although bankruptcy proceedings would
not extinguish the ad valorem taxes securing the Bonds, the bankruptcy of a property owner could result in a delay in
the foreclosure proceedings. Such delay would increase the likelihood of a delay or default in payment of the Bonds
when due. See “SECURITY FOR AND SOURCES OF PAYMENT – Ad Valorem Property Taxation in the District.”
It should be noted that in the event of a bankruptcy of a taxpayer pursuant to the Bankruptcy Code, the law is currently
unsettled as to whether a lien can be attached against the taxpayer’s property for property taxes levied during the
pendency of the bankruptcy proceedings. Such taxes might constitute an unsecured and possible non-interest bearing
administrative expense payable only to the extent that the secured creditors of a taxpayer are over secured, and then
possibly only on a pro rata basis with other allowed administrative claims. It cannot be determined, therefore, what
adverse impact the bankruptcy of a property owner might have on the ability of the District to collect ad valorem taxes
levied on that property before or during the bankruptcy proceedings. Proceeds to pay such taxes come only from the
taxpayer or from a sale of the tax lien on the property.
When a debtor files or is forced into bankruptcy, any act to obtain possession of the debtor’s estate, any act to create
or perfect any lien against the property of the debtor or any act to collect, assess or recover any claim against the
debtor or its estate that arose before the commencement of the bankruptcy is automatically stayed pursuant to the
Bankruptcy Code. While the stay may not prevent the sale of tax liens against the real property of a bankrupt taxpayer,
the judicial or administrative foreclosure of a tax lien against the real property of a debtor in bankruptcy would be
subject to the stay of bankruptcy court. Furthermore, “tax sale investors” may be reluctant to purchase tax liens under
such circumstances, and, therefore, the timeliness of post-bankruptcy petition tax collections become uncertain.
In the event the District is expressly enjoined or prohibited by law from collecting taxes due from any taxpayer, such
as may result from the bankruptcy of a taxpayer, any resulting deficiency could be collected in subsequent tax years
by adjusting the District’s tax rate charged to non-bankrupt taxpayers during such subsequent years.
It cannot be determined what impact any deterioration of the financial condition of any taxpayer, whether or not
protection under the Bankruptcy Code is sought, may have on payment of or the secondary market for the Bonds.
None of the District, the Underwriter, the Financial Advisor, the Developer or their respective counsel, agents or
consultants have undertaken any independent investigation of the operations and financial condition of any of the
property owners in the District, nor have they assumed responsibility for the same.
In addition, the various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond
Counsel’s approving legal opinion) will be qualified, as to the enforceability of the various legal instruments, by
bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally.
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Amendment of Documents Referenced
The reports, inspections and other documents described in this Official Statement may be modified, updated or
amended (as new reports and/or inspections may be obtained), and such modifications may materially and adversely
affect the development of the property (e.g., updating of environmental reports).
The development of the property within the District is only approximately 63.5% complete. Circumstances could
change as the development process continues and other issues are raised or new developers or owners become
involved. Accordingly, the Developer anticipates that there may be significant changes to the agreements and
contracts summarized in this Official Statement to address any such issues. Because the existing contracts and
agreements are subject to change, the summaries of any contracts or agreements contained hereinabove may not
accurately reflect the future conditions relating to the development of the District; however, the Developer does not
presently anticipate that any modifications of the current contracts or agreements would materially affect the
repayment of the Bonds.
Environmental Matters
Property in the District will be subject to risks arising out of environmental, archaeological and biological
considerations generally associated with the ownership of real estate and the construction of improvements located
thereon. Such risks include, in general, potential liability arising as a result of any contamination later discovered on
the site and the possibility of a decline in property values in Festival Foothills and Sun City Festival resulting from
any contamination on the site or from the proximity of the site to other contaminated areas; discovery of archaeological
artifacts located on the site or in the vicinity of the site; discovery of endangered species of animals, plants or other
habitat for endangered species and a determination of the waterways of the United States against dredging or fill.
Liability may arise under a variety of federal, state or local environmental laws and regulations, including, but not
limited to, the Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation
and Recovery Act, the Endangered Species Act and the National Historical Preservation Act. In addition, development
may require approvals and actions under the Clean Water Act and the National Environmental Protection Act may
limit, delay or change materially the number and type of development on the site.
Forward Looking Statements
Included in this Official Statement are various forecasts and projections. The forecasts and projections are forward
looking statements based on assumptions concerning future events and should be viewed with an abundance of
caution. Circumstances that may not yet be ascertainable, which the party making the forecasts or projections believes
to be significant and which such party cannot control may also exist. There are usually differences between projections
and results, because events frequently do not occur as expected, and those differences may be material. There can be
no assurances that the various forecasts and projections set forth in this Official Statement can be achieved.
No Review of Filings
As described in footnote (a) to TABLE 4 and under the heading “DEVELOPER,” none of the District, the Underwriter,
the Financial Advisor, Bond Counsel or counsel to the Underwriter has examined the information set forth in the
Filings for accuracy or completeness, or examined similar information for entities or their parent companies that are
not subject to same or similar informational requirements.
Homeowner Complaints
Various homeowner’s within the age restricted portion of the Project have filed complaints with the Arizona Attorney
General’s Office. The complaints primarily allege that Developer promised to build additional golf course(s) (some
allege an additional 9 holes, some 18 holes), and that there are not enough “tee times” available. In addition, some
homeowners complaints include an objection to the construction of additional non-age restricted homes within the
Project. The Developer denied the allegations and responded with the information requested by the Attorney General’s
Office. The Attorney General’s Office has since closed the matter. There can be no assurance that these complaints
will not have an adverse impact on home sales in the Project.
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Risk of Internal Revenue Service Audit
The Internal Revenue Service (the “Service”) has announced a program of auditing tax-exempt bonds which can
include those issued by special purpose governmental units, such as the District, for the purpose of determining
whether the Service agrees (i) with the determination of Bond Counsel that interest on the Bonds is tax-exempt for
federal income tax purposes or (ii) that the District is in or remains in compliance with Service regulations and
rulings applicable to governmental bonds such as the Bonds. The commencement of an audit of the Bonds could
adversely affect the market value and liquidity of the Bonds, regardless of the final outcome. An adverse
determination by the Service with respect to the tax-exempt status of interest on the Bonds could be expected to
adversely impact the secondary market, if any, for the Bonds, and, if a secondary market exists, would also be
expected to adversely impact the price at which the Bonds can be sold. The Bond Resolution does not provide for
any adjustment to the interest rates borne by the Bonds in the event of a change in the tax-exempt status of the Bonds.
Owners of the Bonds should note that, if the Service audits the Bonds, under current audit procedures the Service will
treat the District as the taxpayer during the initial stage of the audit, and the owners of the Bonds will have limited rights
to participate in such procedures. There can be no assurance that the District will have revenues available to contest
an adverse determination by the Service. No transaction participant, including the District, the Financial Advisor,
Bond Counsel, counsel to the Underwriter, or the Underwriter is obligated to pay or reimburse the owner of any of the
Bonds for audit or litigation costs in connection with any legal action, by the Service or otherwise, relating to the
Bonds.
There can be no assurance that an audit by the Service of the Bonds will not be commenced. However, the District
has no reason to believe that any such audit will be commenced, or that if commenced, an audit would result in a
conclusion of noncompliance with any applicable Service position, regulation or ruling. No rulings have been or will
be sought from the Service with respect to any federal tax matters relating to the issuance, purchase, ownership,
receipt or accrual of interest upon, or disposition of the Bonds. See also “TAX EXEMPTION” herein.
LITIGATION
No litigation or administrative action or proceeding is pending to restrain or enjoin, or seeking to restrain or enjoin,
the issuance and delivery of the Bonds, the levy and collection of taxes to pay the debt service on the Bonds, to contest
or question the proceedings and authority under which the Bonds have been authorized and are to be issued, sold,
executed or delivered, or the validity of the Bonds. Representatives of the District will deliver a certificate to the same
effect at the time of the initial delivery of the Bonds.
LEGAL MATTERS
Legal matters relating to the issuance and delivery of the Bonds, the validity of the Bonds under Arizona law and the
tax-exempt status of the interest on the Bonds (see “TAX EXEMPTION” herein) are subject to the legal opinion of
Bond Counsel. The signed legal opinion of Bond Counsel, dated and premised on the law in effect only as of the date
of original delivery of the Bonds, will be delivered substantially in the form of APPENDIX B.
Such legal opinion expresses the professional judgment of Bond Counsel as to the legal issues explicitly addressed
therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of that expression of
professional judgment, of the transaction opined upon, or of the performance of parties to the transaction. The
rendering of an opinion also does not guarantee the outcome of any legal dispute that may arise out of the transaction.
Certain legal matters will be passed upon for the District by Bond Counsel, for the Underwriter by Greenberg Traurig,
LLP, Phoenix, Arizona, and for the Developer by Berens Blonstein PLC, Scottsdale, Arizona. See “RELATIONSHIP
AMONG PARTIES.”
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FINANCIAL STATEMENTS
The financial statements of the District as of June 30, 2024, and for its fiscal year then ended, which are included as
Appendix E to this Official Statement, have been audited by Heinfeld, Meech & Co., P.C. as stated in its opinion
which appears in Appendix E – “AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30,
2024.” The District neither requested nor obtained the consent of Heinfeld, Meech & Co., P.C. to include its report
and Heinfeld, Meech & Co., P.C. has performed no procedures subsequent to rendering its opinion on the financial
statements. In addition, as a “blended component unit” of the City, certain information regarding the District is
contained in the City’s annual comprehensive financial reports. The City’s annual comprehensive financial report for
the fiscal year ended June 30, 2024, is publicly available and is available upon request from the District Treasurer.
TAX EXEMPTION
In the opinion of Bond Counsel, under existing laws, regulations, rulings and judicial decisions, and assuming
continuing compliance with certain restrictions, conditions and requirements by the District, the interest income on
the Bonds is excludable from gross income for the purpose of calculating federal income taxes under Section 103 of
the Internal Revenue Code of 1986, as amended (the “Code”), and is exempt from Arizona income taxes. Interest
income on the Bonds is not an item of tax preference to be included in computing the alternative minimum tax;
however, such interest is taken into account in determining the annual adjusted financial statement income of
applicable corporations (as defined in Section 59(k) of the Code) for the purpose of computing the alternative
minimum tax imposed on corporations. The opinion of Bond Counsel will be dated as of the date of initial issuance
of the Bonds. The form of such opinion is included as APPENDIX B – “FORM OF APPROVING LEGAL OPINION
OF BOND COUNSEL” attached hereto.
The Code includes requirements that the District must continue to meet after the issuance of the Bonds in order that
the interest on the Bonds remains excludable from gross income for federal income tax purposes. The failure of the
District to meet these requirements may cause the interest on the Bonds to be included in gross income for federal
income tax purposes retroactive to the date of issuance of the Bonds. The District has covenanted to take the actions
required by the Code in order to maintain the exclusion from gross income for federal income tax purposes of the
interest on the Bonds. The opinion of Bond Counsel assumes continuing compliance with such covenants.
Although Bond Counsel will render an opinion that, as of the delivery date of the Bonds, interest income on the Bonds
is excluded from gross income for federal income tax purposes, the accrual or receipt of interest on the Bonds may
otherwise affect a Beneficial Owner’s (as defined in APPENDIX D – “BOOK-ENTRY-ONLY SYSTEM”) federal
tax liability. Certain taxpayers may experience other tax consequences. Taxpayers who become Beneficial Owners
of the Bonds, including without limitation, corporations subject to the branch profits tax, financial institutions, certain
insurance companies, certain subchapter S corporations, individuals who receive Social Security or Railroad
Retirement benefits and taxpayers who have or are deemed to have incurred indebtedness to purchase or carry tax-
exempt obligations, should consult their tax advisors as to the applicability of such tax consequences to the respective
Beneficial Owner. The nature and extent of these other tax consequences will depend upon the Beneficial Owner’s
particular tax status and the Beneficial Owner’s other items of income or deduction. Bond Counsel expresses no
opinion regarding any such other tax consequences.
From time to time, there are legislative proposals in Congress, which, if enacted or made effective, could alter or
amend the federal tax matters referred to above or adversely affect the market value and marketability (liquidity) of
the Bonds. Any such change that occurs before initial delivery of the Bonds could cause Bond Counsel to deliver
opinion substantially different from the opinion shown in APPENDIX B – “FORM OF APPROVING LEGAL
OPINION OF BOND COUNSEL.” The extent of changes in Bond Counsel’s opinion cannot be determined at this
time. It cannot be predicted whether, when or in what form any such proposal or proposals might be enacted or
whether, if enacted, such proposal or proposals would apply to obligations (such as the Bonds) issued prior to the
enactment or effective date. Prospective purchasers should consult with their own tax advisors regarding any other
pending or proposed federal income tax legislation.
32
ORIGINAL ISSUE DISCOUNT
The initial public offering prices of the Bonds maturing on July 15, 20__ through and including July 15, 20__
(collectively, the “Discount Bonds”), are less than the respective amounts payable at maturity. As a result, the
Discount Bonds will be considered to be issued with original issue discount. The difference between the initial public
offering price (assuming it is the first price at which a substantial amount of that maturity of Discount Bonds was sold,
the “OID Issue Price”) of the Discount Bonds and the amount payable at maturity of the Discount Bonds will be
treated as “original issue discount.” With respect to a Beneficial Owner who purchases a Discount Bond in the initial
public offering at the OID Issue Price and who holds the Discount Bond to maturity, the full amount of original issue
discount will constitute interest income which is not includible in the gross income of the Beneficial Owner of the
Discount Bond for federal income tax purposes and Arizona income tax purposes and that Beneficial Owner will not,
under present federal income tax law and present Arizona income tax law, realize a taxable capital gain upon payment
of the Discount Bond at maturity.
The original issue discount on each of the Discount Bonds is treated for federal income tax purposes and Arizona
income tax purposes as accreting daily over the term of such Discount Bond on the basis of a constant interest rate
compounded at the end of each six-month period (or shorter period from the date of original issue) ending on January
15 and July 15 (with straight-line interpolation between compounding dates). The amount of original issue discount
accreting each period will be added to the Beneficial Owner’s tax basis for the Discount Bond. The adjusted tax basis
will be used to determine taxable gain or loss upon disposition of the Discount Bond. An initial Beneficial Owner of
a Discount Bond who disposes of the Discount Bond prior to maturity should consult his or her tax advisor as to the
amount of the original issue discount accrued over the period held and the amount of taxable gain or loss upon the
sale or disposition of the Discount Bond prior to maturity.
The Code contains certain provisions relating to the accretion of original issue discount in the case of subsequent
Beneficial Owners of the Discount Bonds. Beneficial Owners who do not purchase the Discount Bonds in the initial
offering at the OID Issue Price should consult their own tax advisors with respect to the tax consequences of the
ownership of Discount Bonds.
A portion of the original issue discount that accretes in each year to a Beneficial Owner of a Discount Bond may result
in certain collateral federal income tax consequences as described in “TAX EXEMPTION” herein. Beneficial Owners
of Discount Bonds in states other than Arizona should consult their own tax advisors with respect to the state and local
tax consequences of owning Discount Bonds.
BOND PREMIUM
The initial public offering prices of the Bonds maturing on July 15, 20___, through and including July 15, 20__
(collectively, the “Premium Bonds”), are greater than the amount payable on such Premium Bonds at maturity. An
amount equal to the difference between the initial public offering price of a Premium Bond (assuming that a substantial
amount of the Premium Bonds of that maturity are sold to the public at such price) and the amount payable at maturity
constitutes premium to the initial Beneficial Owner of such Premium Bonds. The basis for federal income tax purposes
of a Premium Bond in the hands of such initial Beneficial Owner must be reduced each year by the amortizable bond
premium, although no federal income tax deduction is allowed as a result of such reduction in basis for amortizable
bond premium. Such reduction in basis will increase the amount of any gain (or decrease the amount of any loss) to
be recognized for federal income tax purposes upon a sale or other taxable disposition of a Premium Bond. The amount
of premium which is amortizable each year by an initial Beneficial Owner is determined by using such Beneficial
Owner’s yield to maturity. Beneficial Owners of the Premium Bonds should consult with their own tax advisors with
respect to the determination of amortizable bond premium with respect to the Premium Bonds for federal income tax
purposes and with respect to the state and local tax consequences of owning Premium Bonds.
33
QUALIFIED TAX-EXEMPT OBLIGATIONS
The Bonds will be designated as “qualified tax-exempt obligations” for purposes of Section 265(b)(3)(B) of the
Internal Revenue Code of 1986, as amended, which relates to the ability of certain financial institutions to deduct the
interest expense allocable to holding and carrying tax-exempt obligations for federal income tax purposes.
Representatives of the Board of Directors of the District will represent and warrant that they do not anticipate that the
aggregate amount of tax-exempt obligations that will be issued by or on behalf of the District in calendar year 2025
will exceed $10,000,000.
RATINGS
S&P (as defined herein) is expected to assign the rating of “__” to the Bonds with the understanding that the Policy
will be delivered by the Bond Insurer (as defined herein) simultaneously with the issuance of the Bonds. S&P has
also assigned the underlying rating of “____” to the Bonds. Such ratings reflect only the view of S&P. An explanation
of the significance of a rating assigned by S&P may be obtained at One California Street, 31st Floor, San Francisco,
CA 94111. Such ratings may be revised or withdrawn entirely at any time by S&P if, in its judgment, circumstances
so warrant. Any downward revision or withdrawal of such ratings may have an adverse effect on the market price or
marketability of the Bonds. The District will covenant in its continuing disclosure undertaking with respect to the
Bonds that it will file notice of any formal change in any ratings relating to the Bonds. See “CONTINUING
DISCLOSURE” and APPENDIX C – “FORM OF CONTINUING DISCLOSURE UNDERTAKING” hereto.
BOND INSURANCE
[Bond insurer disclosure]
RISK FACTORS RELATED TO BOND INSURANCE
The following are risk factors relating to bond insurance generally. If the District determines to obtain the Policy for
the Bonds, in the event of default of the payment of principal or interest with respect to any of the Bonds when all or
some become due, any owner of the Bonds on which such principal or interest was not paid will have a claim under
the Policy for such payments. In the event the Bond Insurer is unable to make payment of principal and interest as
such payments become due under the Policy, the Bonds will remain payable solely from ad valorem property taxes as
described under “SECURITY FOR AND SOURCES OF PAYMENT.” In the event the Bond Insurer becomes
obligated to make payments with respect to the Bonds, no assurance will be given that such event will not adversely
affect the market price of the Bonds and the marketability (liquidity) of the Bonds.
The long-term ratings on the Bonds will be dependent in part on the financial strength of the Bond Insurer and its
claims paying ability. The Bond Insurer’s financial strength and claims paying ability will be predicated upon a
number of factors which could change over time. No assurance will be given that the long-term rating of the Bond
Insurer and of the rating on the Bonds insured by the Bond Insurer will not be subject to downgrade, and such event
could adversely affect the market price of the Bonds and the marketability (liquidity) of the Bonds.
The obligations of the Bond Insurer will be general obligations of the Bond Insurer, and in an event of default by the
Bond Insurer, the remedies available may be limited by applicable bankruptcy law, state receivership or other similar
laws related to insolvency of insurance companies.
None of the District, the Underwriter, the Financial Advisor, the Developer or their respective attorneys, agents or
consultants have made independent investigation into the claims paying ability of the Bond Insurer and no assurance
or representation regarding the financial strength or projected financial strength of the Bond Insurer will be given.
Thus, when making an investment decision, potential investors should carefully consider the ability of the District to
pay principal of and interest on the Bonds and the claims paying ability of the Bond Insurer, particularly over the life
of the investment.
34
UNDERWRITING
The Bonds will be purchased by the Underwriter at an aggregate purchase price of $_____________, pursuant to a
bond purchase agreement (the “Bond Purchase Contract”) entered into by and between the District and the
Underwriter. If the Bonds are sold to produce the yields shown on the inside front cover page hereof, the Underwriter’s
compensation will be $____________. The Bond Purchase Contract provides that the Underwriter will purchase all
of the Bonds so offered if any are purchased. The Underwriter may offer and sell the Bonds to certain dealers
(including dealers depositing the Bonds into unit investment trusts) and others at prices higher or yields lower than
the public offering prices or yields stated on the inside front cover page hereof. The initial offering yields set forth on
the inside front cover pages may be changed, from time to time, by the Underwriter.
Stifel and its affiliates comprise a full service financial institution engaged in activities which may include sales and
trading, commercial and investment banking, advisory, investment management, investment research, principal
investment, hedging, market making, brokerage and other financial and non-financial activities and services. Stifel
and its affiliates may have provided, and may in the future provide, a variety of these services to the District and to
persons and entities with relationships with the District, for which they received or will receive customary fees and
expenses.
In the ordinary course of these business activities, Stifel and its affiliates may purchase, sell or hold a broad array of
investments and actively trade securities, derivatives, loans and other financial instruments for their own account and
for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities
and/or instruments of the District (directly, as collateral securing other obligations or otherwise) and/or persons and
entities with relationships with the District.
Stifel and its affiliates may also communicate independent investment recommendations, market color or trading ideas
and/or publish or express independent research views in respect of such assets, securities or instruments and may at
any time hold, or recommend to clients that they should acquire such assets, securities and instruments. Such
investment and securities activities may involve securities and instruments of the District.
CONTINUING DISCLOSURE
The District will covenant for the benefit of the owners of the Bonds to provide certain financial information and
operating data relating to the District by not later than February 1 in each year commencing February 1, 2026 (the
“Annual Reports”), and to provide notices of the occurrence of certain enumerated events (the “Notices of Listed
Events”). The Annual Reports, the Notices of Listed Events and any other document or information required to be
filed by the District as such will be filed with the Municipal Securities Rulemaking Board (“MSRB”) through the
Electronic Municipal Market Access System of the MSRB, as described in APPENDIX C – “FORM OF
CONTINUING DISCLOSURE UNDERTAKING.” The specific nature of the information to be contained in the
Annual Reports and the Notices of Listed Events is also set forth in APPENDIX C - “FORM OF CONTINUING
DISCLOSURE UNDERTAKING.” These covenants will be made in order to assist the Underwriter in complying
with the SEC’s Rule 15c2-12(b)(5) (the “Rule”). A failure by the District to comply with these covenants must be
reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer
before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such a failure may
adversely affect the transferability and liquidity of the Bonds and their market price. Pursuant to Arizona Law, the
ability of the District to comply with such covenants will be subject to annual appropriation of funds sufficient to
provide for the costs of compliance with such covenants. Should the District not comply with such covenants due to
a failure to appropriate for such purpose, the District has covenanted to provide notice of such fact to the MSRB.
Absence of continuing disclosure, due to non-appropriation or otherwise, could adversely affect the Bonds,
specifically their market price and transferability.
[To be confirmed upon receipt of the District’s third-party continuing disclosure report]
The District has implemented written procedures to facilitate compliance with previously entered continuing
disclosure undertakings and the continuing disclosure undertaking related to the Bonds and future similar
undertakings.
35
FINANCIAL ADVISOR
Hilltop Securities Inc. (the “Financial Advisor”) has been engaged by the District for the purpose of advising the
District as to certain debt service structuring matters specific to the Bonds and on certain matters relative to the
District’s overall debt financing program. The Financial Advisor has assisted in the assembly and preparation of this
Official Statement at the direction and on behalf of the District. No person is entitled to rely on the Financial Advisor’s
participation as an assumption of responsibility for, or an expression of opinion of any kind with regard to, the accuracy
and completeness of the information contained herein.
RELATIONSHIP AMONG PARTIES
Bond Counsel has previously represented, and is currently representing, the Underwriter with respect to other
financings and has acted or is acting as bond counsel with respect to other bonds underwritten by the Underwriter and
may do so in the future. Bond Counsel also serves and has served as bond counsel for one or more of the political
subdivisions that the District territorially overlaps. Counsel to the Underwriter has previously acted as bond counsel
with respect to other bonds underwritten by the Underwriter and may continue to do so in the future if requested.
The Underwriter and the Financial Advisor have underwritten or acted as financial advisor with respect to bonds
issued by the City and other overlapping political subdivisions.
36
CONCLUDING STATEMENT
To the extent that any statements made in this Official Statement involve matters of opinion or estimates, whether or
not expressly stated to be such, they are made as such and not as representations of fact or certainty and no
representation is made that any of these opinions or estimates have been or will be realized. Information in this Official
Statement has been derived by the District from official and other sources and is believed by the District to be accurate
and reliable. Information other than that obtained from official records of the District has not been independently
confirmed or verified by the District and its accuracy is not guaranteed.
Neither this Official Statement not any statement that may have been or that may be made orally or in writing is to be
construed as part of a contract with the original purchasers or subsequent owners of the Bonds.
This Official Statement has been approved, executed and delivered by the District.
FESTIVAL RANCH COMMUNITY FACILITIES DISTRICT
(CITY OF BUCKEYE, ARIZONA)
By:
Chairman, Board of Directors
A-1
APPENDIX A
INFORMATION REGARDING THE
CITY OF BUCKEYE, ARIZONA
The following information concerning the City is for background information only as the District lies within the
geographical limits of the City. THE BONDS ARE NOT AN OBLIGATION OF THE CITY IN ANY RESPECT. THE
BONDS ARE DIRECT GENERAL OBLIGATIONS OF THE DISTRICT, PAYABLE FROM AD VALOREM TAXES
LEVIED AGAINST ALL TAXABLE PROPERTY IN THE DISTRICT, AS DESCRIBED UNDER THE HEADING
“SECURITY FOR AND SOURCES OF PAYMENT.”
General
The City is located approximately 30 miles from downtown Phoenix, Arizona (“Phoenix”), approximately four miles
south of Interstate 10 on State Route 85. The City was founded in 1888 and incorporated in 1929. The City’s
municipal boundaries encompass approximately 650 square miles and the City sits at an elevation of 888 feet above
sea level. Not all property within the perimeter boundaries of the City is annexed into the City, however, over 392
square miles are annexed into the City.
The following table illustrates respective population statistics for the City, the County, and the State.
POPULATION STATISTICS
Calendar
Years
City of
Buckeye
Maricopa
County
State of
Arizona
2024 Estimate (a)
109,729
4,726,247
7,621,703
2020 Census
91,502
4,420,568
7,151,502
2010 Census
50,876
3,817,117
6,392,017
2000 Census
8,497
3,072,149
5,130,632
1990 Census
4,436
2,122,101
3,665,339
1980 Census
3,434
1,509,175
2,716,546
(a)
Estimate as of December 2024.
Source:
U.S. Census Bureau, Population Division – Annual Estimates of the Resident Population, Arizona Office
of Economic Opportunity – State, County, Place Level Population Estimates for July 1, and U.S. Census
Bureau (2020, 2010, 2000 and 1990) – Census of Population and Housing.
Government
The City operates under a Council-Manager form of government. The “Council” is comprised of the Mayor and six
Councilmembers. The Mayor is elected at large every four years. Councilmembers each represent a district and are
elected to staggered four-year terms. The Council appoints a Manager who has full responsibility for carrying out
Council policies and administering operations.
The City provides a portion of its residents with water and sewer services; electricity is provided by Arizona Public
Service Company, natural gas is provided by Southwest Gas Company and telephone service is provided by
CenturyLink Communications Inc. In some areas of the City, water and/or sewer services are provided by private
utility companies.
A-2
Economy
The Roosevelt Irrigation District and Buckeye Water Conservation and Drainage District canals provide a renewable
supply of water for the City’s farming needs. Employment for the City’s residents is provided by agricultural activity
services, education, government and the nearby Palo Verde Nuclear Plant. The Palo Verde Nuclear Plant is located
approximately 20 miles west of the City and is outside the boundaries of the City. The close proximity of the City to
the greater Phoenix metropolitan area also provides employment. Part of the City’s agricultural production includes
Pima cotton which is processed in local cotton gins and exported worldwide. See below for certain historic
employment information and a list of major employers located in and within close proximity of the City.
MAJOR EMPLOYERS
City of Buckeye, Arizona
Employer
Description
Approximate
Number of
Employees
Walmart
Retail/Distribution
1,590
State of Arizona
Government
1,300
City of Buckeye
Government
740
Litchfield Elementary School District No. 79
Education
490
Buckeye Elementary School District No. 33
Education
460
Frys Food Stores
Retail/Grocery
420
Clayton Homes
Homebuilder
300
Funko
Distribution
300
The Odyssey Preparatory Academy
Education
190
Liberty Elementary School District No. 25
Education
160
Source:
Maricopa Association of Governments, Employer Database (data accessed April 30, 2025).
The table below illustrates the unemployment rate averages for the City.
UNEMPLOYMENT RATE AVERAGES
Calendar
Year
City of
Buckeye (a)
2025 (b)
4.2%
2024
3.6
2023
4.6
2022
4.5
2021
6.1
2020
8.1
(a)
Each year, historical estimates from the Local Area Unemployment Statistics (LAUS) program are revised to
reflect new population controls from the Census Bureau, updated input data, and re-estimation. The data for
model-based areas also incorporate new seasonal adjustment, and the unadjusted estimates are controlled to
new census division and U.S. totals. Substate area data subsequently are revised to incorporate updated
inputs, re-estimation, and controlling to new statewide totals.
(b)
Data is not seasonally adjusted, is preliminary and is an average of January 2025 through March 2025. Data
accessed April 30, 2025.
Source:
Arizona Office of Economic Opportunity, in cooperation with the U.S. Department of Labor, Bureau of
Labor Statistics.
A-3
Commerce
The following table illustrates taxable sales collections for the City.
MUNICIPAL PRIVILEGE TAX COLLECTIONS
City of Buckeye, Arizona
($000s omitted)
Fiscal
Year
Amount
2023/24
$85,303
2022/23
73,679
2021/22
62,067
2020/21
52,929
2019/20
40,276
Source:
Arizona Department of Revenue, Municipal Privilege Tax Collection Program.
B-1
APPENDIX B
FORM OF LEGAL OPINION OF BOND COUNSEL
[Closing Date]
District Board
Festival Ranch Community Facilities District
(City of Buckeye, Arizona)
Re:
Festival Ranch Community Facilities District
(City of Buckeye, Arizona)
General Obligation Bonds, Series 2025
Honorable Board:
At your request we have examined the official proceedings leading to the issuance of $5,340,000* aggregate
principal amount of Festival Ranch Community Facilities District (City of Buckeye, Arizona) General Obligation Bonds,
Series 2025 (the “Bonds”), dated [Closing Date], issued by the Festival Ranch Community Facilities District (City of
Buckeye, Arizona) (the “District”).
We have examined the law and such documents and matters as we have deemed necessary to render this opinion
including, without limitation, Resolution No. 06-25, passed and adopted by the Board of Directors of the District (the
“District Board”) on May 20, 2025* (the “Resolution”). As to questions of fact material to our opinion we have relied
upon, and assumed due and continuing compliance with the provisions of, the proceedings and other documents, and have
relied upon certifications, covenants and representations furnished to us without undertaking to verify the same by
independent investigation, including, without limitation, those with respect to causing interest on the Bonds to be and
remain excluded from gross income for federal income tax purposes.
Based upon the foregoing, we are of the opinion, as of this date, which is the date of initial delivery of the Bonds
against payment therefor, that:
1.
The District is duly created and validly existing as a community facilities district and political
subdivision of the State of Arizona with power to pass and adopt the Resolution, perform the agreements on its part
contained therein and issue the Bonds.
2.
The Resolution has been duly passed and adopted by the District Board and is valid and binding upon
and enforceable against the District.
3.
The Bonds and the proceedings leading to and including the issuance thereof are legal and constitute
a valid and binding general obligation of the District.
4.
All taxable property within the District is subject to the levy of a direct, annual, ad valorem tax to pay
the principal of and interest on the Bonds without limit as to rate or amount. It is required by law that there be levied,
assessed and collected, at the same time and in the same manner as other taxes of the District, an annual tax upon the
taxable property in the District sufficient, together with any money from other sources lawfully available, to pay the
principal of and interest on the Bonds when due.
*
Subject to change.
B-2
5.
Under existing laws, regulations, rulings and judicial decisions, the interest income on the Bonds is
excludable from gross income for the purpose of calculating federal income taxes under Section 103 of the Internal
Revenue Code of 1986, as amended (the “Code”) and is exempt from Arizona income taxes. Interest income on the
Bonds is not an item of tax preference to be included in computing the alternative minimum tax; however, such interest
is taken into account in determining the annual adjusted financial statement income of applicable corporations (as defined
in Section 59(k) of the Internal Revenue Code of 1986, as amended) for the purpose of computing the alternative
minimum tax imposed on corporations. The opinion set forth in the preceding sentence is subject to the condition that
the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order
that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes under
Section 103 of the Code. The City has covenanted to comply with all such requirements. Failure to comply with certain
of such requirements may cause interest on the Bonds to be includable in gross income for federal income tax purposes
retroactively to the date of issuance of the Bonds. For purposes of this opinion, we have assumed continuing compliance
by the City with such restrictions, conditions, and requirements. We express no opinion regarding other federal tax
consequences arising with respect to the Bonds.
The rights of the owners of the Bonds and the enforceability of the Bonds are limited by bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting the rights and remedies of creditors, and by equitable
principles, whether considered at law or in equity.
We express no opinion regarding the accuracy, adequacy, or completeness of the Official Statement
dated as of [
], relating to the Bonds. Further, we express no opinion regarding tax consequences arising
with respect to the Bonds other than as expressly set forth herein.
The opinions given in this opinion letter are given as of the date set forth above, and we assume no
obligation to revise or supplement them to reflect any facts or circumstances that may later come to our attention, or any
changes in law that may later occur.
GUST ROSENFELD P.L.C.
C-1
APPENDIX C
FORM OF CONTINUING DISCLOSURE UNDERTAKING
CONTINUING DISCLOSURE UNDERTAKING
$5,340,000
FESTIVAL RANCH COMMUNITY FACILITIES DISTRICT
(CITY OF BUCKEYE, ARIZONA)
\GENERAL OBLIGATION BONDS, SERIES 2025
(CUSIP BASE NUMBER 315598)
This Undertaking is executed and delivered by Festival Ranch Community Facilities District (City of
Buckeye, Arizona) (the “Issuer”), in connection with the issuance of the captioned municipal securities (the
“Securities”) for the benefit of the owners of the Securities, being the registered owners thereof or any person which
has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any of the
Securities (including persons holding the Securities through nominees, depositories or other intermediaries) or is
treated as the owner of any Securities for federal income tax purposes.
Section 1. Definitions.
“Annual Report” shall mean any annual report provided by the Issuer pursuant to, and as described
in, Section 2.
“Authorizing Document” shall mean the resolution or resolutions authorizing the issuance of the
Securities.
“Dissemination Agent” shall mean any agent which has executed a dissemination agent agreement
with the Issuer and such successors and assigns of such agent.
“EMMA” shall mean the Electronic Municipal Market Access system of the Municipal Securities
Rulemaking Board. Information regarding submissions to EMMA is available at http://emma.msrb.org.
“Financial Obligation” shall mean a (i) debt obligation; (ii) derivative instrument entered into in
connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) a
guarantee of (i) or (ii). The term Financial Obligation shall not include municipal securities as to which a final official
statement has been provided to the Municipal Securities Rulemaking Board consistent with the Rule.
“Listed Events” shall mean any of the events listed in Section 3(a).
“Notice of Listed Event” shall mean any notice provided by the Issuer pursuant to, and as described
in, Section 3.
“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as the same may be amended from time to time.
* Subject to change.
C-2
Section 2. Contents and Provision of Annual Reports.
(a)
(i)
SUBJECT TO ANNUAL APPROPRIATION TO COVER THE COSTS OF
PREPARATION AND MAILING THEREOF, THE ISSUER SHALL, OR SHALL CAUSE THE
DISSEMINATION AGENT TO, NOT LATER THAN FEBRUARY 1 OF EACH YEAR, COMMENCING
FEBRUARY 1, 2026, PROVIDE THROUGH EMMA AN ANNUAL REPORT WHICH IS CONSISTENT WITH
THE REQUIREMENTS OF SUBSECTION (b) OF THIS SECTION.
(ii)
IF THE ISSUER IS UNABLE OR FOR ANY OTHER REASON FAILS TO
PROVIDE AN ANNUAL REPORT OR ANY PART THEREOF BY THE DATE REQUIRED IN SUBSECTION
(a)(i) OF THIS SECTION, THE ISSUER SHALL, OR SHALL CAUSE THE DISSEMINATION AGENT TO,
SEND A NOTICE TO THAT EFFECT NOT LATER THAN SUCH DATE THROUGH EMMA ALONG WITH
THE OTHER PARTS, IF ANY, OF THE ANNUAL REPORT.
(b)
(i)
The Annual Reports shall contain or incorporate by reference the following:
(A)
Information of the type in TABLES 2, 3, 4, 6, 7 and 10 of the Official
Statement, dated __________, 2025, with respect to the Securities.
(B)
Audited financial statements for the preceding fiscal year, if any, such
statements to be prepared on the basis of generally accepted accounting principles as applied to governmental units.
IF THE FISCAL YEAR OF THE ISSUER CHANGES, THE ISSUER SHALL, OR SHALL CAUSE THE
DISSEMINATION AGENT TO, FILE A NOTICE OF SUCH CHANGE IN THE SAME MANNER AS FOR A
NOTICE OF LISTED EVENT.
(ii)
The Annual Report may be submitted as a single document or as separate
documents comprising a package and may incorporate by reference from other documents other information, including
final offering documents of debt issues of the Issuer or related public entities which have been submitted to the
Municipal Securities Rulemaking Board. If the document incorporated by reference is a final official statement, it
must be available from the Municipal Securities Rulemaking Board. The Issuer shall clearly identify each such other
document so incorporated by reference.
(iii)
If audited financial statements are to be included in an Annual Report but are
not available in time to satisfy the requirements of Subsection (a)(i) of this Section, unaudited financial statements
must be provided at the requisite time as part of the Annual Report and as soon as possible (but not later than thirty
(30) days) after such audited financial statements become available, the audited financial statements shall be
provided through EMMA.
Section 3. Reporting of Listed Events.
(a)
This Section shall govern the giving of notices of the occurrence of any of the following
events (the “Listed Events”) with respect to the Securities:
(i)
Principal and interest payment delinquencies.
(ii)
Non-payment related defaults, if material.
(iii)
Unscheduled draws on debt service reserves reflecting financial difficulties.
(iv)
Unscheduled draws on credit enhancements reflecting financial difficulties.
(v)
Substitution of credit or liquidity providers, or their failure to perform.
(vi)
Adverse tax opinions, the issuance by the Internal Revenue Service of proposed
or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or
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determinations with respect to the tax status of the security, or other material events affecting the tax status of the
security.
(vii)
Modifications to rights of security holders, if material.
(viii)
Bond calls, if material, and tender offers.
(ix)
Defeasances.
(x)
Release, substitution or sale of property securing repayment of the securities, if
material.
(xi)
Rating changes.
(xii)
Bankruptcy, insolvency, receivership or similar events of the obligated person,
being if any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated
person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which
a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the
obligated person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or
officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an
order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having
supervision or jurisdiction over substantially all of the assets or business of the obligated person.
(xiii)
The consummation of a merger, consolidation or acquisition involving the
obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary
course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive
agreement relating to any such actions, other than pursuant to its terms, if material.
(xiv)
Appointment of a successor or additional trustee or the change of the name of the
trustee, if material.
(xv)
Incurrence of a Financial Obligation of the obligated person, if material, or
agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation
of the obligated person, any of which affect security holders, if material.
(xvi)
Default, event of acceleration, termination event, modification of terms, or other
similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial
difficulties.
(xvii)
Notice of a failure of the obligated person to provide required annual financial
information on or before the date specified in Section 2 above, including any non-appropriation to cover applicable
costs.
(b)
Whether events subject to the standard “material” would be material shall be determined
under applicable federal securities laws.
(c)
SUBJECT TO ANNUAL APPROPRIATION TO COVER THE COSTS OF
PREPARATION AND MAILING THEREOF, THE ISSUER SHALL, OR SHALL CAUSE THE
DISSEMINATION AGENT TO, PROMPTLY, BUT NOT MORE THAN TEN (10) BUSINESS DAYS
THEREAFTER, FILE A NOTICE OF LISTED EVENT OF SUCH OCCURRENCE THROUGH EMMA.
Section 4. Termination of Reporting Obligation. The obligations of the Issuer pursuant to this Undertaking
shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Securities. SUBJECT TO
ANNUAL APPROPRIATION TO COVER THE COSTS OF PREPARATION AND MAILING THEREOF, THE
ISSUER SHALL, OR SHALL CAUSE THE DISSEMINATION AGENT TO, GIVE NOTICE OF SUCH
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TERMINATION THROUGH EMMA AS SOON AS PRACTICABLE, BUT NOT LATER THAN THE DATE AN
ANNUAL REPORT WOULD OTHERWISE HAVE BEEN DUE.
Section 5. Amendment or Waiver.
(a)
Notwithstanding any other provision of this Undertaking, the Issuer may amend this
Undertaking, and any provision of this Undertaking may be waived, if such amendment or waiver is supported by an
opinion of counsel expert in federal securities laws, to the effect that (i) such amendment or waiver is made in
connection with a change in circumstances that arises from a change in legal requirements, change in law or change
in the identity, nature or status of the Issuer or type of business conducted; (ii) this Undertaking, as amended or affected
by such waiver, would have complied with the requirements of the Rule at the time of the primary offering of the
Securities, after taking into account any amendments or interpretations of the Rule, as well as any change in
circumstances and (iii) such amendment or waiver does not materially impair the interests of the owners of the
Securities, as determined either by parties (such as bond counsel) unaffiliated with the Issuer or by an approving vote
of the registered owners of the Securities pursuant to the terms of the Authorizing Document at the time of the
amendments.
(b)
The Annual Report containing amended operating data or financial information resulting
from such amendment or waiver, if any, shall explain, in narrative form, the reasons for the amendment or waiver and
the impact of the change in the type of operating data or financial information being provided. If an amendment or
waiver is made specifying the accounting principles to be followed in preparing financial statements, the Annual
Report for the year in which the change is made shall present a comparison between the financial statements or
information prepared on the basis of the new accounting principles and those prepared on the basis of the former
accounting principles. Such comparison shall include a qualitative discussion of the differences in the accounting
principles and the impact of the change in the accounting principles on the presentation of the financial information
in order to provide information to investors to enable them to evaluate the ability of the Issuer to meet its obligations.
To the extent reasonably feasible, such comparison also shall be quantitative. IF THE ACCOUNTING
PRINCIPLES OF THE ISSUER CHANGE, THE ISSUER SHALL, OR SHALL CAUSE THE DISSEMINATION
AGENT TO, FILE A NOTICE OF SUCH CHANGE IN THE SAME MANNER AS FOR A NOTICE OF LISTED
EVENT.
Section 6. Additional Information. Nothing in this Undertaking shall be deemed to prevent the Issuer from
disseminating any other information, using the means of dissemination set forth in this Undertaking or any other means
of communication, or including any other information in any Annual Report or Notice of Listed Event, in addition to
that which is required by this Undertaking. If the Issuer chooses to include any information in any Annual Report or
Notice of Listed Event in addition to that which is specifically required by this Undertaking, the Issuer shall have no
obligation under this Undertaking to update such information or include it in any future Annual Report or Notice of
Listed Event.
Section 7. Default. In the event of a failure of the Issuer to comply with any provision of this Undertaking,
any owner of a Security for the benefit of which this Undertaking is being provided may take such actions as may be
necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to
comply with its obligations under this Undertaking. A default under this Undertaking shall not be deemed an event
of default for other purposes of the Authorizing Document, and the sole remedy under this Undertaking in the event
of any failure of the Issuer to comply with this Undertaking shall be an action to compel performance.
Section 8. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination
Agent to assist the Issuer in satisfying the obligations of the Issuer hereunder and may discharge any such
Dissemination Agent, with or without appointing a successor Dissemination Agent.
Section 9. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have
only such duties as are specifically set forth in this Undertaking and the applicable, related agency agreement, and, to
the extent permitted by applicable law, the Issuer shall indemnify and save the Dissemination Agent, its officers,
directors, employees and agents, harmless for, from and against any loss, expense and liabilities which the
Dissemination Agent may incur arising out of or in the exercise or performance of the powers and duties of the
Dissemination Agent pursuant to this Undertaking and the applicable, related agency agreement, including the costs
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and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the
gross negligence or willful misconduct of the Dissemination Agent. The obligations of the Issuer under this Section
shall survive resignation or removal of the Dissemination Agent and payment of the Securities.
Dated: [Closing Date]
FESTIVAL RANCH COMMUNITY FACILITIES
DISTRICT (CITY OF BUCKEYE, ARIZONA)
By ...............................................................................................
Chairman, Board of Directors
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APPENDIX D
BOOK-ENTRY-ONLY SYSTEM
The Depository Trust Company (“DTC”) will act as securities depository for the Bonds. The Bonds will be issued as
fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as
may be requested by an authorized representative of DTC. One fully-registered Bond will be issued for each maturity
of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC or held by the
Bond Registrar and Paying Agent for DTC.
DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York
Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal
Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a
“clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC
holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and
municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct
Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and
other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges
between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct
Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing
Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed
Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its
regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities
brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly (“Indirect Participants” and together with the Direct
Participants, the “Participants”). DTC has Standard & Poor’s rating of: “AA+.” The DTC Rules applicable to its
Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at
www.dtcc.com.
Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a
credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial
Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive
written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written
confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or
Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests
in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf
of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the
Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of
DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of
DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee
do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the
Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited,
which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Beneficial Owners of the Bonds may wish to take certain steps to augment the transmission to them of notices of
significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the
Bond documents. For example, Beneficial Owners of the Bonds may wish to ascertain that the nominee holding the
D-2
Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial
Owners may wish to provide their names and addresses to the Bond Registrar and Paying Agent and request that
copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC’s
practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless
authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails
an Omnibus Proxy to the District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s
consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Payment of principal of and interest on the Bonds and the redemption price of any Bond will be made to Cede & Co.,
or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct
Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the District or the Bond
Registrar and Paying Agent, on payable date in accordance with their respective holdings shown on DTC’s records.
Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as
is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be
the responsibility of such Participant and not of DTC, the Bond Registrar and Paying Agent or the District, subject to
any statutory or regulatory requirements as may be in effect from time to time. Payment of principal of and interest
on the Bonds and the redemption price of any Bonds will be made to Cede & Co. (or such other nominee as may be
requested by an authorized representative of DTC) is the responsibility of the District or Bond Registrar and Paying
Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of
such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable
notice to the District or the Bond Registrar and Paying Agent. Under such circumstances, in the event that a successor
depository is not obtained, certificates are required to be printed and delivered.
The District may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor
securities depository). In that event, certificates will be printed and delivered to DTC.
The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that
the District believes to be reliable, but the District takes no responsibility for the accuracy thereof. The Beneficial
Owners should confirm this information with DTC or the DTC participants.
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APPENDIX E
AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2024
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APPENDIX F
SPECIMEN MUNICIPAL BOND INSURANCE POLICY